☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ohio | 31-1626393 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer ☐ | Accelerated filer ☒ |
Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company ☐ |
Emerging growth company ☐ |
Item 1. | Financial Statements |
September 30, 2017 | December 31, 2016 | |||||||
(Unaudited) | ||||||||
ASSETS: | ||||||||
Cash and due from banks | $ | 15,393 | $ | 18,378 | ||||
Interest-bearing demand deposits | 5,810 | 487 | ||||||
Total cash and cash equivalents | 21,203 | 18,865 | ||||||
Investment securities: | ||||||||
Available-for-sale, at fair value | 310,404 | 320,659 | ||||||
Held-to-maturity, at cost | 36,860 | 41,003 | ||||||
Federal Reserve Bank stock, at cost | 2,732 | 2,732 | ||||||
Federal Home Loan Bank stock, at cost | 3,638 | 3,638 | ||||||
Loans, net | 830,797 | 816,228 | ||||||
Premises and equipment, net | 34,897 | 30,244 | ||||||
Goodwill | 30,183 | 30,183 | ||||||
Core deposit and other intangibles | 4,003 | 4,582 | ||||||
Bank owned life insurance | 27,795 | 27,307 | ||||||
Other assets | 11,807 | 11,358 | ||||||
TOTAL ASSETS | $ | 1,314,319 | $ | 1,306,799 | ||||
LIABILITIES: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 278,773 | $ | 271,332 | ||||
Interest-bearing | 842,750 | 839,573 | ||||||
Total deposits | 1,121,523 | 1,110,905 | ||||||
Short-term borrowings | 30,000 | 42,040 | ||||||
Long-term debt | 363 | 598 | ||||||
Accrued interest and other liabilities | 12,720 | 10,312 | ||||||
TOTAL LIABILITIES | 1,164,606 | 1,163,855 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES | — | — | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Preferred shares – no par value, authorized 1,000,000 shares, none outstanding | — | — | ||||||
Common shares – no par value; authorized 19,000,000 shares; issued 10,772,134 and 10,751,652 shares at September 30, 2017 and December 31, 2016, respectively | 76,877 | 76,490 | ||||||
Retained earnings | 85,287 | 80,736 | ||||||
Treasury shares at cost, 753,627 shares at September 30, 2017 and December 31, 2016 | (11,665 | ) | (11,665 | ) | ||||
Accumulated other comprehensive loss, net of taxes | (786 | ) | (2,617 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY | 149,713 | 142,944 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,314,319 | $ | 1,306,799 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
INTEREST INCOME: | ||||||||||||||||
Interest and fees on loans | $ | 9,095 | $ | 8,876 | $ | 26,833 | $ | 26,395 | ||||||||
Interest on investment securities: | ||||||||||||||||
Taxable | 1,108 | 1,152 | 3,350 | 3,528 | ||||||||||||
Non-taxable | 783 | 813 | 2,377 | 2,365 | ||||||||||||
Other investments | 69 | 54 | 293 | 236 | ||||||||||||
TOTAL INTEREST INCOME | 11,055 | 10,895 | 32,853 | 32,524 | ||||||||||||
INTEREST EXPENSE: | ||||||||||||||||
Interest on deposits | 850 | 872 | 2,539 | 2,565 | ||||||||||||
Interest on short-term borrowings | 55 | 8 | 97 | 30 | ||||||||||||
Interest on long-term debt | 3 | 5 | 10 | 22 | ||||||||||||
TOTAL INTEREST EXPENSE | 908 | 885 | 2,646 | 2,617 | ||||||||||||
NET INTEREST INCOME | 10,147 | 10,010 | 30,207 | 29,907 | ||||||||||||
PROVISION FOR LOAN LOSSES | (12 | ) | 372 | 225 | 858 | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 10,159 | 9,638 | 29,982 | 29,049 | ||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||
Trust income | 871 | 871 | 2,604 | 2,471 | ||||||||||||
Service charges and fees on deposit accounts | 1,352 | 1,276 | 3,886 | 3,712 | ||||||||||||
Net gain on sales of securities | 78 | 307 | 218 | 957 | ||||||||||||
Bank owned life insurance income | 190 | 193 | 676 | 553 | ||||||||||||
Gains from sales of loans | 34 | 73 | 136 | 175 | ||||||||||||
Other operating income | 134 | 126 | 359 | 370 | ||||||||||||
TOTAL NON-INTEREST INCOME | 2,659 | 2,846 | 7,879 | 8,238 | ||||||||||||
NON-INTEREST EXPENSE: | ||||||||||||||||
Salaries and employee benefits | 4,678 | 4,642 | 13,907 | 13,737 | ||||||||||||
Equipment expenses | 361 | 279 | 836 | 767 | ||||||||||||
Occupancy expense, net | 685 | 550 | 1,889 | 1,707 | ||||||||||||
State franchise tax | 281 | 279 | 851 | 836 | ||||||||||||
Marketing | 282 | 162 | 641 | 530 | ||||||||||||
Amortization of intangibles | 189 | 189 | 562 | 564 | ||||||||||||
FDIC insurance premiums | 108 | 168 | 320 | 495 | ||||||||||||
Contracted services | 307 | 300 | 930 | 750 | ||||||||||||
Other real estate owned | 3 | 222 | 8 | 607 | ||||||||||||
Other non-interest expense | 1,778 | 1,802 | 5,307 | 5,360 | ||||||||||||
TOTAL NON-INTEREST EXPENSE | 8,672 | 8,593 | 25,251 | 25,353 | ||||||||||||
INCOME BEFORE INCOME TAXES | 4,146 | 3,891 | 12,610 | 11,934 | ||||||||||||
PROVISION FOR INCOME TAXES | 1,040 | 995 | 3,255 | 3,106 | ||||||||||||
NET INCOME | $ | 3,106 | $ | 2,896 | $ | 9,355 | $ | 8,828 | ||||||||
Dividends declared per common share | $ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.31 | $ | 0.29 | $ | 0.93 | $ | 0.89 | ||||||||
Diluted | 0.31 | 0.29 | 0.93 | 0.88 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 10,008,807 | 9,962,571 | 10,002,812 | 9,930,182 | ||||||||||||
Diluted | 10,015,204 | 9,972,623 | 10,009,942 | 9,967,635 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income | $ | 3,106 | $ | 2,896 | $ | 9,355 | $ | 8,828 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Net unrealized gain (loss) on available-for-sale securities (net of taxes of $127 and $357 for the three months ended September 30, 2017 and 2016, respectively, and $1,021 and $1,975 for the nine months ended September 30, 2017 and 2016, respectively) | 240 | (691 | ) | 1,974 | 3,835 | |||||||||||
Reclassification adjustment for net realized gain on sale of available-for-sale securities included in net income (net of taxes of $27 and $104 for the three months ended September 30, 2017 and 2016, respectively, and $75 and $325 for the nine months ended September 30, 2017 and 2016, respectively) | (51 | ) | (203 | ) | (143 | ) | (632 | ) | ||||||||
Change in nonqualified pension plan unrecognized net loss and unrecognized prior service cost (net of taxes of $15 and $43 for the three and nine months ended September 30, 2016, respectively) | — | 27 | — | 83 | ||||||||||||
Other comprehensive income (loss), net of tax | 189 | (867 | ) | 1,831 | 3,286 | |||||||||||
TOTAL COMPREHENSIVE INCOME | $ | 3,295 | $ | 2,029 | $ | 11,186 | $ | 12,114 |
Common Shares Outstanding | Common Stock | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity | ||||||||||||||||||
Balance at December 31, 2015 | 9,925,547 | $ | 76,908 | $ | 74,629 | $ | (11,665 | ) | $ | 236 | $ | 140,108 | |||||||||||
Net income | 8,828 | 8,828 | |||||||||||||||||||||
Other comprehensive income, net of taxes | 3,286 | 3,286 | |||||||||||||||||||||
Dividend Reinvestment and Stock Purchase Plan | 16,758 | 282 | 282 | ||||||||||||||||||||
Repurchase of stock warrants | (1,545 | ) | (1,545 | ) | |||||||||||||||||||
Exercise of stock options | 51,390 | 592 | 592 | ||||||||||||||||||||
Excess tax benefit on exercise of stock options | 58 | 58 | |||||||||||||||||||||
Compensation expense relating to stock options | 4 | 4 | |||||||||||||||||||||
Compensation expense relating to restricted stock | 68 | 68 | |||||||||||||||||||||
Common stock dividends, $0.48 per share | (4,775 | ) | (4,775 | ) | |||||||||||||||||||
Balance at September 30, 2016 | 9,993,695 | $ | 76,367 | $ | 78,682 | $ | (11,665 | ) | $ | 3,522 | $ | 146,906 | |||||||||||
Balance at December 31, 2016 | 9,998,025 | $ | 76,490 | $ | 80,736 | $ | (11,665 | ) | $ | (2,617 | ) | $ | 142,944 | ||||||||||
Net income | 9,355 | 9,355 | |||||||||||||||||||||
Other comprehensive income, net of taxes | 1,831 | 1,831 | |||||||||||||||||||||
Dividend Reinvestment and Stock Purchase Plan | 13,057 | 266 | 266 | ||||||||||||||||||||
Exercise of stock options | 3,398 | 51 | 51 | ||||||||||||||||||||
Compensation expense relating to stock options | 1 | 1 | |||||||||||||||||||||
Compensation expense relating to restricted stock | 4,027 | 69 | 69 | ||||||||||||||||||||
Common stock dividends, $0.48 per share | (4,804 | ) | (4,804 | ) | |||||||||||||||||||
Balance at September 30, 2017 | 10,018,507 | $ | 76,877 | $ | 85,287 | $ | (11,665 | ) | $ | (786 | ) | $ | 149,713 |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 9,355 | $ | 8,828 | ||||
Adjustments to reconcile net income to net cash flows from operating activities: | ||||||||
Depreciation, amortization, and accretion | 2,732 | 2,672 | ||||||
Provision for loan losses | 225 | 858 | ||||||
Increase in cash surrender value of bank owned life insurance | (569 | ) | (553 | ) | ||||
Bank owned life insurance mortality benefits in excess of cash surrender value | (107 | ) | — | |||||
Realized gain from sales of securities available-for-sale | (218 | ) | (957 | ) | ||||
Realized loss from sales and impairment of premises and equipment | 121 | 35 | ||||||
Realized loss from sales and impairment of other real estate owned and repossessed assets | 3 | 537 | ||||||
Origination of mortgage loans for sale | (6,012 | ) | (7,853 | ) | ||||
Realized gains from sales of loans | (136 | ) | (175 | ) | ||||
Proceeds from sales of mortgage loans | 6,076 | 7,955 | ||||||
Penalty for prepayment of long-term debt | — | 251 | ||||||
Compensation expense related to stock options | 1 | 4 | ||||||
Compensation expense related to restricted stock | 69 | 68 | ||||||
Changes in: | ||||||||
Accrued income receivable | (1,210 | ) | (1,208 | ) | ||||
Other assets | 514 | 1,494 | ||||||
Other liabilities | 1,708 | (1,025 | ) | |||||
TOTAL ADJUSTMENTS | 3,197 | 2,103 | ||||||
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | 12,552 | 10,931 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from sales of investment securities available-for-sale | 26,407 | 62,252 | ||||||
Proceeds from maturities and calls of investment securities: | ||||||||
Available-for-sale | 12,486 | 41,157 | ||||||
Held-to-maturity | 9,518 | 5,306 | ||||||
Purchases of investment securities: | ||||||||
Available-for-sale | (27,002 | ) | (67,139 | ) | ||||
Held-to-maturity | (5,375 | ) | (24,710 | ) | ||||
Net increase in loans | (15,402 | ) | (40,908 | ) | ||||
Purchase of bank owned life insurance | — | (4,000 | ) | |||||
Proceeds from bank owned life insurance mortality benefits | 189 | — | ||||||
Proceeds from sale of other real estate owned and repossessed assets | 971 | 253 | ||||||
Additions to other real estate owned | — | (182 | ) | |||||
Purchases of premises and equipment | (6,082 | ) | (5,234 | ) | ||||
Proceeds from sale of premises and equipment | 220 | 61 | ||||||
NET CASH FLOWS USED IN INVESTING ACTIVITIES | (4,070 | ) | (33,144 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net increase in deposits | 10,618 | 71,761 | ||||||
Net decrease in short-term borrowings | (12,040 | ) | (20,398 | ) | ||||
Principal payments on long-term debt | (235 | ) | (5,285 | ) | ||||
Penalty for prepayment of long-term debt | — | (251 | ) | |||||
Proceeds from issuance of common stock | 27 | 38 | ||||||
Repurchase of stock warrants | — | (1,545 | ) | |||||
Proceeds from exercise of stock options | 51 | 650 | ||||||
Cash dividends paid on common stock | (4,565 | ) | (4,531 | ) | ||||
NET CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES | (6,144 | ) | 40,439 | |||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 2,338 | 18,226 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 18,865 | 14,987 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 21,203 | $ | 33,213 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Interest paid | $ | 2,651 | $ | 2,680 | ||||
Income taxes paid | 1,610 | 3,330 | ||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES: | ||||||||
Transfer from loans to other real estate owned and repossessed assets | 974 | 32 |
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
September 30, 2017 | |||||||||||||||
Available-for-Sale: | |||||||||||||||
U.S. Treasury notes | $ | 16,112 | $ | 44 | $ | 4 | $ | 16,152 | |||||||
U.S. Agency notes | 87,862 | 119 | 1,035 | 86,946 | |||||||||||
U.S. Agency mortgage-backed securities | 71,541 | 70 | 890 | 70,721 | |||||||||||
Municipal securities: | |||||||||||||||
Non-taxable | 110,517 | 889 | 683 | 110,723 | |||||||||||
Taxable | 22,398 | 259 | 35 | 22,622 | |||||||||||
Mutual funds | 2,576 | 1 | 38 | 2,539 | |||||||||||
Trust preferred securities | 49 | 1 | — | 50 | |||||||||||
Equity securities | 574 | 80 | 3 | 651 | |||||||||||
$ | 311,629 | $ | 1,463 | $ | 2,688 | $ | 310,404 | ||||||||
Held-to-Maturity: | |||||||||||||||
Municipal securities: | |||||||||||||||
Non-taxable | $ | 33,160 | $ | 112 | $ | 38 | $ | 33,234 | |||||||
Taxable | 3,700 | — | 129 | 3,571 | |||||||||||
$ | 36,860 | $ | 112 | $ | 167 | $ | 36,805 | ||||||||
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 |
Less than Twelve Months | Twelve Months or Greater | ||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||
September 30, 2017 | |||||||||||||||
Available-for-Sale: | |||||||||||||||
U.S. Treasury notes | $ | 1,297 | $ | 4 | $ | — | $ | — | |||||||
U.S. Agency notes | 67,239 | 779 | 8,736 | 256 | |||||||||||
U.S. Agency mortgage-backed securities | 52,116 | 608 | 7,536 | 282 | |||||||||||
Municipal securities: | |||||||||||||||
Non-taxable | 28,502 | 407 | 8,006 | 276 | |||||||||||
Taxable | 7,170 | 35 | 450 | — | |||||||||||
Mutual funds | — | — | 1,517 | 38 | |||||||||||
Trust preferred securities | — | — | — | — | |||||||||||
Equity securities | 10 | 1 | 31 | 2 | |||||||||||
$ | 156,334 | $ | 1,834 | $ | 26,276 | $ | 854 | ||||||||
Held-to-Maturity: | |||||||||||||||
Municipal securities: | |||||||||||||||
Non-taxable | $ | 962 | 1 | 3,483 | 37 | ||||||||||
Taxable | 3,171 | 129 | — | — | |||||||||||
$ | 4,133 | $ | 130 | $ | 3,483 | $ | 37 | ||||||||
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 |
Available-for-Sale | Held-to-Maturity | ||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
Due within one year | $ | 10,477 | $ | 10,500 | $ | 6,171 | $ | 6,196 | |||||||
Due from one to five years | 109,760 | 110,262 | 4,065 | 4,050 | |||||||||||
Due from five to ten years | 109,140 | 108,443 | 10,322 | 10,315 | |||||||||||
Due after ten years | 7,512 | 7,238 | 16,302 | 16,244 | |||||||||||
236,889 | 236,443 | 36,860 | 36,805 | ||||||||||||
U.S. Agency mortgage-backed securities | 71,541 | 70,721 | — | — | |||||||||||
Mutual funds | 2,576 | 2,539 | — | — | |||||||||||
Trust preferred securities | 49 | 50 | — | — | |||||||||||
Equity securities | 574 | 651 | — | — | |||||||||||
$ | 311,629 | $ | 310,404 | $ | 36,860 | $ | 36,805 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Proceeds from sales | $ | 14,164 | $ | 25,723 | $ | 26,407 | $ | 62,252 | |||||||
Gross realized gains | 78 | 307 | 218 | 978 | |||||||||||
Gross realized losses | — | — | — | 21 |
September 30, 2017 | December 31, 2016 | ||||||
Commercial and industrial | $ | 36,049 | $ | 41,878 | |||
Commercial, secured by real estate | 510,158 | 477,275 | |||||
Residential real estate | 253,530 | 265,788 | |||||
Consumer | 17,956 | 19,173 | |||||
Agricultural | 15,677 | 14,802 | |||||
Other loans, including deposit overdrafts | 570 | 633 | |||||
833,940 | 819,549 | ||||||
Deferred origination costs (fees), net | 264 | 254 | |||||
834,204 | 819,803 | ||||||
Less allowance for loan losses | 3,407 | 3,575 | |||||
Loans, net | $ | 830,797 | $ | 816,228 |
September 30, 2017 | December 31, 2016 | ||||||
Non-accrual loans: | |||||||
Commercial and industrial | $ | — | $ | — | |||
Commercial, secured by real estate | 2,840 | 4,312 | |||||
Residential real estate | 1,180 | 1,079 | |||||
Consumer | — | — | |||||
Agricultural | 367 | 334 | |||||
Total non-accrual loans | 4,387 | 5,725 | |||||
Past-due 90 days or more and still accruing | 95 | 23 | |||||
Total non-accrual and past-due 90 days or more and still accruing | 4,482 | 5,748 | |||||
Accruing restructured loans | 10,791 | 11,731 | |||||
Total | $ | 15,273 | $ | 17,479 |
Commercial & Industrial | Commercial, Secured by Real Estate | Residential Real Estate | Consumer | Agricultural | Other | Total | |||||||||||||||||||||
Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||
Balance, beginning of period | $ | 273 | $ | 2,136 | $ | 822 | $ | 86 | $ | 61 | $ | 4 | $ | 3,382 | |||||||||||||
Provision charged to expenses | 8 | (9 | ) | (139 | ) | (6 | ) | 113 | 21 | (12 | ) | ||||||||||||||||
Losses charged off | — | (118 | ) | — | (30 | ) | — | (37 | ) | (185 | ) | ||||||||||||||||
Recoveries | 19 | 106 | 38 | 44 | — | 15 | 222 | ||||||||||||||||||||
Balance, end of period | $ | 300 | $ | 2,115 | $ | 721 | $ | 94 | $ | 174 | $ | 3 | $ | 3,407 | |||||||||||||
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||
Balance, beginning of year | $ | 350 | $ | 2,179 | $ | 885 | $ | 96 | $ | 60 | $ | 5 | $ | 3,575 | |||||||||||||
Provision charged to expenses | (84 | ) | 287 | (137 | ) | (3 | ) | 114 | 48 | 225 | |||||||||||||||||
Losses charged off | — | (462 | ) | (135 | ) | (84 | ) | — | (98 | ) | (779 | ) | |||||||||||||||
Recoveries | 34 | 111 | 108 | 85 | — | 48 | 386 | ||||||||||||||||||||
Balance, end of period | $ | 300 | $ | 2,115 | $ | 721 | $ | 94 | $ | 174 | $ | 3 | $ | 3,407 | |||||||||||||
Three Months Ended September 30, 2016 | |||||||||||||||||||||||||||
Balance, beginning of period | $ | 273 | $ | 2,071 | $ | 885 | $ | 80 | $ | 62 | $ | 2 | $ | 3,373 | |||||||||||||
Provision charged to expenses | 162 | 193 | (46 | ) | 36 | 6 | 21 | 372 | |||||||||||||||||||
Losses charged off | — | (19 | ) | (21 | ) | (30 | ) | — | (33 | ) | (103 | ) | |||||||||||||||
Recoveries | 12 | 80 | 43 | 9 | — | 12 | 156 | ||||||||||||||||||||
Balance, end of period | $ | 447 | $ | 2,325 | $ | 861 | $ | 95 | $ | 68 | $ | 2 | $ | 3,798 | |||||||||||||
Nine Months Ended September 30, 2016 | |||||||||||||||||||||||||||
Balance, beginning of year | $ | 244 | $ | 1,908 | $ | 854 | $ | 54 | $ | 66 | $ | 3 | 3,129 | ||||||||||||||
Provision charged to expenses | 236 | 478 | 19 | 85 | 2 | 38 | 858 | ||||||||||||||||||||
Losses charged off | (49 | ) | (159 | ) | (63 | ) | (83 | ) | — | (75 | ) | (429 | ) | ||||||||||||||
Recoveries | 16 | 98 | 51 | 39 | — | 36 | 240 | ||||||||||||||||||||
Balance, end of period | $ | 447 | $ | 2,325 | $ | 861 | $ | 95 | $ | 68 | $ | 2 | $ | 3,798 |
Commercial & Industrial | Commercial, Secured by Real Estate | Residential Real Estate | Consumer | Agricultural | Other | Total | |||||||||||||||||||||
September 30, 2017 | |||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 7 | $ | 182 | $ | 49 | $ | 9 | $ | 121 | $ | — | $ | 368 | |||||||||||||
Collectively evaluated for impairment | 293 | 1,933 | 672 | 85 | 53 | 3 | 3,039 | ||||||||||||||||||||
Acquired credit impaired loans | — | — | — | — | — | — | — | ||||||||||||||||||||
Balance, end of period | $ | 300 | $ | 2,115 | $ | 721 | $ | 94 | $ | 174 | $ | 3 | $ | 3,407 | |||||||||||||
Loans: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 311 | $ | 12,416 | $ | 1,519 | $ | 50 | $ | 367 | $ | — | $ | 14,663 | |||||||||||||
Collectively evaluated for impairment | 34,771 | 493,124 | 250,117 | 18,008 | 15,325 | 127 | 811,472 | ||||||||||||||||||||
Acquired credit impaired loans | 1,008 | 4,264 | 2,351 | 3 | — | 443 | 8,069 | ||||||||||||||||||||
Balance, end of period | $ | 36,090 | $ | 509,804 | $ | 253,987 | $ | 18,061 | $ | 15,692 | $ | 570 | $ | 834,204 | |||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 9 | $ | 55 | $ | 100 | $ | 13 | $ | — | $ | — | $ | 177 | |||||||||||||
Collectively evaluated for impairment | 341 | 1,832 | 785 | 83 | 60 | 5 | 3,106 | ||||||||||||||||||||
Acquired credit impaired loans | — | 292 | — | — | — | — | 292 | ||||||||||||||||||||
Balance, end of period | $ | 350 | $ | 2,179 | $ | 885 | $ | 96 | $ | 60 | $ | 5 | $ | 3,575 | |||||||||||||
Loans: | |||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 337 | $ | 12,580 | $ | 1,518 | $ | 52 | $ | 334 | $ | — | $ | 14,821 | |||||||||||||
Collectively evaluated for impairment | 41,466 | 458,059 | 262,266 | 19,192 | 14,475 | 178 | 795,636 | ||||||||||||||||||||
Acquired credit impaired loans | 98 | 6,305 | 2,471 | 17 | — | 455 | 9,346 | ||||||||||||||||||||
Balance, end of period | $ | 41,901 | $ | 476,944 | $ | 266,255 | $ | 19,261 | $ | 14,809 | $ | 633 | $ | 819,803 |
• | Pass – loans categorized in this category are higher quality loans that do not fit any of the other categories described below. |
• | Other Assets Especially Mentioned ("OAEM") – loans in this category are currently protected but are potentially weak. These loans constitute a risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an undue risk in light of the circumstances surrounding a specific asset. |
• | Substandard – loans in this category are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that LCNB will sustain some loss if the deficiencies are not corrected. |
• | Doubtful – loans classified in this category have all the weaknesses inherent in loans classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. |
Pass | OAEM | Substandard | Doubtful | Total | |||||||||||||||
September 30, 2017 | |||||||||||||||||||
Commercial & industrial | $ | 35,586 | $ | 197 | $ | 307 | $ | — | $ | 36,090 | |||||||||
Commercial, secured by real estate | 484,670 | 4,451 | 20,683 | — | 509,804 | ||||||||||||||
Residential real estate | 251,393 | — | 2,594 | — | 253,987 | ||||||||||||||
Consumer | 18,028 | — | 33 | — | 18,061 | ||||||||||||||
Agricultural | 14,475 | — | 1,217 | — | 15,692 | ||||||||||||||
Other | 570 | — | — | — | 570 | ||||||||||||||
Total | $ | 804,722 | $ | 4,648 | $ | 24,834 | $ | — | $ | 834,204 | |||||||||
December 31, 2016 | |||||||||||||||||||
Commercial & industrial | $ | 41,178 | $ | 304 | $ | 419 | $ | — | $ | 41,901 | |||||||||
Commercial, secured by real estate | 443,781 | 5,479 | 27,684 | — | 476,944 | ||||||||||||||
Residential real estate | 261,839 | 442 | 3,974 | — | 266,255 | ||||||||||||||
Consumer | 19,182 | — | 79 | — | 19,261 | ||||||||||||||
Agricultural | 13,311 | — | 1,498 | — | 14,809 | ||||||||||||||
Other | 633 | — | — | — | 633 | ||||||||||||||
Total | $ | 779,924 | $ | 6,225 | $ | 33,654 | $ | — | $ | 819,803 |
30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Current | Total Loans Receivable | Total Loans Greater Than 90 Days and Accruing | |||||||||||||||||||||
September 30, 2017 | |||||||||||||||||||||||||||
Commercial & industrial | $ | 4 | $ | — | $ | — | $ | 4 | $ | 36,086 | $ | 36,090 | $ | — | |||||||||||||
Commercial, secured by real estate | 781 | — | 795 | 1,576 | 508,228 | 509,804 | — | ||||||||||||||||||||
Residential real estate | 514 | 26 | 1,178 | 1,718 | 252,269 | 253,987 | 95 | ||||||||||||||||||||
Consumer | 4 | 3 | — | 7 | 18,054 | 18,061 | — | ||||||||||||||||||||
Agricultural | — | — | 367 | 367 | 15,325 | 15,692 | — | ||||||||||||||||||||
Other | 69 | — | — | 69 | 501 | 570 | — | ||||||||||||||||||||
Total | $ | 1,372 | $ | 29 | $ | 2,340 | $ | 3,741 | $ | 830,463 | $ | 834,204 | $ | 95 | |||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||
Commercial & industrial | $ | 19 | $ | — | $ | — | $ | 19 | $ | 41,882 | $ | 41,901 | $ | — | |||||||||||||
Commercial, secured by real estate | 99 | 69 | 127 | 295 | 476,649 | 476,944 | — | ||||||||||||||||||||
Residential real estate | 686 | 80 | 727 | 1,493 | 264,762 | 266,255 | 20 | ||||||||||||||||||||
Consumer | 59 | 16 | 3 | 78 | 19,183 | 19,261 | 3 | ||||||||||||||||||||
Agricultural | 125 | — | — | 125 | 14,684 | 14,809 | — | ||||||||||||||||||||
Other | 115 | — | — | 115 | 518 | 633 | — | ||||||||||||||||||||
Total | $ | 1,103 | $ | 165 | $ | 857 | $ | 2,125 | $ | 817,678 | $ | 819,803 | $ | 23 |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||
Commercial & industrial | $ | 1,016 | $ | 1,154 | $ | — | $ | 109 | $ | 263 | $ | — | |||||||||||
Commercial, secured by real estate | 13,722 | 14,854 | — | 14,195 | 15,522 | — | |||||||||||||||||
Residential real estate | 3,272 | 4,341 | — | 3,238 | 4,286 | — | |||||||||||||||||
Consumer | 10 | 10 | — | 26 | 27 | — | |||||||||||||||||
Agricultural | 190 | 190 | — | 334 | 334 | — | |||||||||||||||||
Other | 443 | 591 | — | 455 | 629 | — | |||||||||||||||||
Total | $ | 18,653 | $ | 21,140 | $ | — | $ | 18,357 | $ | 21,061 | $ | — | |||||||||||
With an allowance recorded: | |||||||||||||||||||||||
Commercial & industrial | $ | 303 | $ | 308 | $ | 7 | $ | 326 | $ | 326 | $ | 9 | |||||||||||
Commercial, secured by real estate | 2,958 | 2,957 | 182 | 4,690 | 4,946 | 347 | |||||||||||||||||
Residential real estate | 598 | 624 | 49 | 751 | 751 | 100 | |||||||||||||||||
Consumer | 43 | 43 | 9 | 43 | 43 | 13 | |||||||||||||||||
Agricultural | 177 | 177 | 121 | — | — | — | |||||||||||||||||
Other | — | — | — | — | — | — | |||||||||||||||||
Total | $ | 4,079 | $ | 4,109 | $ | 368 | $ | 5,810 | $ | 6,066 | $ | 469 | |||||||||||
Total: | |||||||||||||||||||||||
Commercial & industrial | $ | 1,319 | $ | 1,462 | $ | 7 | $ | 435 | $ | 589 | $ | 9 | |||||||||||
Commercial, secured by real estate | 16,680 | 17,811 | 182 | 18,885 | 20,468 | 347 | |||||||||||||||||
Residential real estate | 3,870 | 4,965 | 49 | 3,989 | 5,037 | 100 | |||||||||||||||||
Consumer | 53 | 53 | 9 | 69 | 70 | 13 | |||||||||||||||||
Agricultural | 367 | 367 | 121 | 334 | 334 | — | |||||||||||||||||
Other | 443 | 591 | — | 455 | 629 | — | |||||||||||||||||
Total | $ | 22,732 | $ | 25,249 | $ | 368 | $ | 24,167 | $ | 27,127 | $ | 469 |
2017 | 2016 | ||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | ||||||||||||
Three Months Ended September 30, | |||||||||||||||
With no related allowance recorded: | |||||||||||||||
Commercial & industrial | $ | 945 | $ | 10 | $ | 1,356 | $ | 34 | |||||||
Commercial, secured by real estate | 13,671 | 184 | 15,594 | 236 | |||||||||||
Residential real estate | 3,268 | 45 | 3,769 | 113 | |||||||||||
Consumer | 16 | — | 29 | 7 | |||||||||||
Agricultural | 142 | — | 384 | — | |||||||||||
Other | 438 | 12 | 480 | 18 | |||||||||||
Total | $ | 18,480 | $ | 251 | $ | 21,612 | $ | 408 | |||||||
With an allowance recorded: | |||||||||||||||
Commercial & industrial | $ | 306 | $ | 4 | $ | 476 | $ | 5 | |||||||
Commercial, secured by real estate | 2,970 | 11 | 3,383 | 41 | |||||||||||
Residential real estate | 604 | 7 | 695 | 8 | |||||||||||
Consumer | 43 | 1 | 45 | 1 | |||||||||||
Agricultural | 178 | — | — | — | |||||||||||
Other | — | — | — | — | |||||||||||
Total | $ | 4,101 | $ | 23 | $ | 4,599 | $ | 55 | |||||||
Total: | |||||||||||||||
Commercial & industrial | $ | 1,251 | $ | 14 | $ | 1,832 | $ | 39 | |||||||
Commercial, secured by real estate | 16,641 | 195 | 18,977 | 277 | |||||||||||
Residential real estate | 3,872 | 52 | 4,464 | 121 | |||||||||||
Consumer | 59 | 1 | 74 | 8 | |||||||||||
Agricultural | 320 | — | 384 | — | |||||||||||
Other | 438 | 12 | 480 | 18 | |||||||||||
Total | $ | 22,581 | $ | 274 | $ | 26,211 | $ | 463 | |||||||
Nine Months Ended September 30, | |||||||||||||||
With no related allowance recorded: | |||||||||||||||
Commercial & industrial | $ | 603 | $ | 46 | $ | 1,167 | $ | 89 | |||||||
Commercial, secured by real estate | 14,099 | 685 | 16,654 | 897 | |||||||||||
Residential real estate | 3,280 | 180 | 3,809 | 306 | |||||||||||
Consumer | 24 | 2 | 41 | 22 | |||||||||||
Agricultural | 57 | — | 403 | 135 | |||||||||||
Other | 450 | 43 | 488 | 58 | |||||||||||
Total | $ | 18,513 | $ | 956 | $ | 22,562 | $ | 1,507 | |||||||
With an allowance recorded: | |||||||||||||||
Commercial & industrial | $ | 314 | $ | 13 | $ | 400 | $ | 15 | |||||||
Commercial, secured by real estate | 3,085 | 35 | 2,960 | 82 | |||||||||||
Residential real estate | 634 | 23 | 680 | 24 | |||||||||||
Consumer | 43 | 2 | 43 | 2 | |||||||||||
Agricultural | 240 | — | — | — | |||||||||||
Other | — | — | — | — | |||||||||||
Total | $ | 4,316 | $ | 73 | $ | 4,083 | $ | 123 | |||||||
Total: | |||||||||||||||
Commercial & industrial | $ | 917 | $ | 59 | $ | 1,567 | $ | 104 | |||||||
Commercial, secured by real estate | 17,184 | 720 | 19,614 | 979 | |||||||||||
Residential real estate | 3,914 | 203 | 4,489 | 330 | |||||||||||
Consumer | 67 | 4 | 84 | 24 | |||||||||||
Agricultural | 297 | — | 403 | 135 | |||||||||||
Other | 450 | 43 | 488 | 58 | |||||||||||
Total | $ | 22,829 | 1,029 | $ | 26,645 | $ | 1,630 |
2017 | 2016 | ||||||||||||||||||||
Number of Loans | Pre-Modification Recorded Balance | Post-Modification Recorded Balance | Number of Loans | Pre-Modification Recorded Balance | Post-Modification Recorded Balance | ||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||
Commercial & industrial | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||
Commercial, secured by real estate | — | — | — | 1 | 304 | 304 | |||||||||||||||
Residential real estate | — | — | — | 1 | 27 | 27 | |||||||||||||||
Consumer | — | — | — | 1 | 11 | 11 | |||||||||||||||
Total | — | $ | — | $ | — | 3 | $ | 342 | $ | 342 | |||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||
Commercial & industrial | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||
Commercial, secured by real estate | — | — | — | 2 | 603 | 676 | |||||||||||||||
Residential real estate | 1 | 18 | 9 | 3 | 72 | 72 | |||||||||||||||
Consumer | 1 | 14 | 14 | 3 | 38 | 38 | |||||||||||||||
Total | 2 | $ | 32 | $ | 23 | 8 | $ | 713 | $ | 786 |
Term Modification | Rate Modification | Interest Only | Principal Forgiveness | Combination | Total Modifications | ||||||||||||||||||
Three Months Ended September 30, 2017 | |||||||||||||||||||||||
Commercial & industrial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Commercial, secured by real estate | — | — | — | — | — | — | |||||||||||||||||
Residential real estate | — | — | — | — | — | — | |||||||||||||||||
Consumer | — | — | — | — | — | — | |||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||
Commercial & industrial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Commercial, secured by real estate | — | — | — | — | — | — | |||||||||||||||||
Residential real estate | — | — | — | 9 | — | 9 | |||||||||||||||||
Consumer | 14 | — | — | — | — | 14 | |||||||||||||||||
Total | $ | 14 | $ | — | $ | — | $ | 9 | $ | — | $ | 23 | |||||||||||
Three Months Ended September 30, 2016 | |||||||||||||||||||||||
Commercial & industrial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Commercial, secured by real estate | — | — | 304 | — | — | 304 | |||||||||||||||||
Residential real estate | — | — | — | — | 27 | 27 | |||||||||||||||||
Consumer | — | — | — | — | 11 | 11 | |||||||||||||||||
Total | $ | — | $ | — | $ | 304 | $ | — | $ | 38 | $ | 342 | |||||||||||
Nine Months Ended September 30, 2016 | |||||||||||||||||||||||
Commercial & industrial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Commercial, secured by real estate | — | — | 304 | — | 372 | 676 | |||||||||||||||||
Residential real estate | 18 | 27 | — | — | 27 | 72 | |||||||||||||||||
Consumer | — | 27 | — | — | 11 | 38 | |||||||||||||||||
Total | $ | 18 | $ | 54 | $ | 304 | $ | — | $ | 410 | $ | 786 |
September 30, 2017 | December 31, 2016 | ||||||
Commercial & industrial | $ | 1,008 | $ | 98 | |||
Commercial, secured by real estate | 4,264 | 6,305 | |||||
Residential real estate | 2,351 | 2,471 | |||||
Consumer | 3 | 17 | |||||
Agricultural | — | — | |||||
Other loans, including deposit overdrafts | 443 | 455 | |||||
8,069 | 9,346 | ||||||
Less allowance for loan losses | — | 292 | |||||
Loans, net | $ | 8,069 | $ | 9,054 |
September 30, 2017 | December 31, 2016 | ||||||
Outstanding balance | $ | 10,346 | $ | 12,289 | |||
Carrying amount | 8,069 | 9,346 |
2017 | 2016 | ||||||
Accretable discount at beginning of year | $ | 1,080 | $ | 1,503 | |||
Reclassification from nonaccretable discount to accretable discount | 160 | 307 | |||||
Less disposals | (170 | ) | (3 | ) | |||
Less accretion | (257 | ) | (439 | ) | |||
Accretable discount at end of period | $ | 813 | $ | 1,368 |
September 30, 2017 | December 31, 2016 | ||||||
Affordable housing tax credit investment | $ | 3,000 | $ | 2,000 | |||
Less amortization | 220 | 93 | |||||
Net affordable housing tax credit investment | $ | 2,780 | $ | 1,907 | |||
Unfunded commitment | $ | 2,372 | $ | 1,617 |
2017 | 2016 | ||||||
Tax credits and other tax benefits recognized | $ | 119 | $ | 83 | |||
Tax credit amortization expense included in provision for income taxes | 126 | 62 |
September 30, 2017 | December 31, 2016 | ||||||||||||
Amount | Rate | Amount | Rate | ||||||||||
FHLB short-term advance | $ | 30,000 | 1.18 | % | $ | 25,000 | 0.63 | % | |||||
Repurchase agreements | — | — | % | 17,040 | 0.10 | % | |||||||
$ | 30,000 | 1.18 | % | $ | 42,040 | 0.42 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Statutory tax rate | 35.0 | % | 34.2 | % | 35.0 | % | 34.2 | % | |||
Increase (decrease) resulting from: | |||||||||||
Tax exempt interest | (6.4 | )% | (7.0 | )% | (6.4 | )% | (6.6 | )% | |||
Tax exempt income on bank owned life insurance | (1.6 | )% | (1.7 | )% | (1.9 | )% | (1.6 | )% | |||
Other, net | (1.9 | )% | 0.1 | % | (0.9 | )% | — | % | |||
Effective tax rate | 25.1 | % | 25.6 | % | 25.8 | % | 26.0 | % |
September 30, 2017 | December 31, 2016 | ||||||
Commitments to extend credit: | |||||||
Commercial loans | $ | 14,542 | $ | 10,350 | |||
Other loans | |||||||
Fixed rate | 3,105 | 4,425 | |||||
Adjustable rate | 1,089 | 1,044 | |||||
Unused lines of credit: | |||||||
Fixed rate | 19,897 | 9,731 | |||||
Adjustable rate | 86,021 | 80,222 | |||||
Unused overdraft protection amounts on demand and NOW accounts | 16,609 | 17,123 | |||||
Standby letters of credit | 594 | 657 | |||||
Total commitments | $ | 141,857 | $ | 123,552 |
Unrealized Gains and Losses on Available-for-Sale Securities | Changes in Pension Plan Assets and Benefit Obligations | Total | |||||||||
Nine Months Ended September 30, 2017: | |||||||||||
Balance at beginning of period | $ | (2,633 | ) | $ | 16 | $ | (2,617 | ) | |||
Before reclassifications | 1,974 | — | 1,974 | ||||||||
Reclassifications | (143 | ) | — | (143 | ) | ||||||
Balance at end of period | $ | (802 | ) | $ | 16 | $ | (786 | ) | |||
Year Ended December 31, 2016: | |||||||||||
Balance at beginning of period | $ | 469 | $ | (233 | ) | $ | 236 | ||||
Before reclassifications | (2,390 | ) | 249 | (2,141 | ) | ||||||
Reclassifications | (712 | ) | — | (712 | ) | ||||||
Balance at end of period | $ | (2,633 | ) | $ | 16 | $ | (2,617 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | Affected Line Item in the Consolidated Condensed Statements of Income | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Realized gain on sale of securities | $ | 78 | $ | 307 | $ | 218 | $ | 957 | Net gain on sales of securities | ||||||||
Less provision for income taxes | 27 | 104 | 75 | 325 | Provision for income taxes | ||||||||||||
Reclassification adjustment, net of taxes | $ | 51 | 203 | $ | 143 | $ | 632 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Qualified noncontributory defined benefit retirement plan | $ | 267 | 272 | $ | 789 | $ | 712 | |||||||
401(k) plan | 102 | 81 | 298 | 241 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | — | 10 | $ | — | $ | 30 | ||||||||
Interest cost | 17 | 20 | 51 | 58 | |||||||||||
Amortization of unrecognized net loss | — | 42 | — | 126 | |||||||||||
Net periodic pension cost | $ | 17 | 72 | $ | 51 | $ | 214 |
September 30, 2017 | December 31, 2016 | ||||||
Net actuarial (gain) loss | $ | (16 | ) | $ | (16 | ) | |
Past service cost | — | — | |||||
Total recognized in accumulated other comprehensive income (loss), net of tax | $ | (16 | ) | $ | (16 | ) |
Outstanding Stock Options | Exercisable Stock Options | |||||||||||||||||
Exercise Price Range | Number | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Number | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||||
$9.00 - $10.99 | 4,356 | $ | 9.00 | 1.3 | 4,356 | $ | 9.00 | 1.3 | ||||||||||
$11.00 - $12.99 | 15,909 | 12.08 | 2.9 | 15,909 | 12.08 | 2.9 | ||||||||||||
20,265 | 11.42 | 2.6 | 20,265 | 11.42 | 2.6 |
Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | ||||||||||
Outstanding, January 1, | 24,669 | $ | 12.17 | 83,861 | $ | 12.39 | |||||||
Exercised | (3,398 | ) | 14.94 | (51,390 | ) | 11.53 | |||||||
Expired | (1,006 | ) | 17.88 | (7,802 | ) | 18.76 | |||||||
Outstanding, September 30, | 20,265 | 11.42 | 24,669 | 12.17 | |||||||||
Exercisable, September 30, | 20,265 | 11.42 | 22,924 | 12.13 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Intrinsic value of options exercised | $ | 25 | $ | 288 | |||
Cash received from options exercised | 51 | 592 | |||||
Tax benefit realized from options exercised | 5 | 59 |
2017 | 2016 | ||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding, January 1, | 8,624 | $ | 15.47 | 16,038 | $ | 15.47 | |||||||
Granted | 4,027 | 22.60 | — | — | |||||||||
Vested | (2,011 | ) | 17.87 | (5,255 | ) | 15.47 | |||||||
Forfeited | — | — | — | — | |||||||||
Outstanding, September 30, | 10,640 | $ | 17.71 | 10,783 | $ | 15.47 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 3,106 | $ | 2,896 | $ | 9,355 | $ | 8,828 | |||||||
Less allocation of earnings and dividends to participating securities | 2 | — | 6 | — | |||||||||||
Net income allocated to common shareholders | $ | 3,104 | $ | 2,896 | $ | 9,349 | $ | 8,828 | |||||||
Weighted average common shares outstanding, gross | 10,014,840 | 9,962,571 | 10,008,845 | 9,930,182 | |||||||||||
Less average participating securities | 6,033 | — | 6,033 | — | |||||||||||
Weighted average number of shares outstanding used in the calculation of basic earnings per common share | 10,008,807 | 9,962,571 | 10,002,812 | 9,930,182 | |||||||||||
Add dilutive effect of: | |||||||||||||||
Stock options | 6,397 | 10,052 | 7,130 | 15,360 | |||||||||||
Stock warrants | — | — | — | 22,093 | |||||||||||
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share | 10,015,204 | 9,972,623 | 10,009,942 | 9,967,635 | |||||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.31 | $ | 0.29 | $ | 0.93 | $ | 0.89 | |||||||
Diluted | 0.31 | 0.29 | 0.93 | 0.88 |
• | Level 1 – quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the reporting date. |
• | Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly or indirectly. Level 2 inputs may include quoted prices for similar assets in active markets, quoted prices for identical assets or liabilities in markets that are not active, inputs other than quoted prices (such as interest rates or yield curves) that are observable for the asset or liability, and inputs that are derived from or corroborated by observable market data. |
• | Level 3 – inputs that are unobservable for the asset or liability. |
• | Fair value for U.S. Treasury notes are determined based on market quotations (level 1). |
• | Fair values for the other debt securities are calculated using the discounted cash flow method for each security. The discount rates for these cash flows are estimated by the pricing service using rates observed in the market (level 2). Cash flow streams are dependent on estimated prepayment speeds and the overall structure of the securities given existing market conditions. |
• | Fair value for trust preferred and equity securities are determined based on market quotations (level 1). These securities are not priced by the pricing service. |
• | LCNB has investments in five mutual funds. These investments are not priced by the pricing service. Investments in two of the mutual funds are measured at fair value using net asset values ("NAV") per share as a practical expedient and are not required to be classified in the fair value hierarchy. These funds can be redeemed at any time at their current NAVs. Two other mutual funds are traded in active markets and their fair values are based on market quotations (level 1). The investment in the remaining mutual fund, which is not traded in an active market, is considered to have level 2 inputs because an investor can have its interest in the fund redeemed for the balance of its capital account at any quarter-end assuming the fund is given a 60 day notice. The investment in this fund is carried at fair value, which approximates cost. |
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||
Fair Value Measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
September 30, 2017 | |||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||
U.S. Treasury notes | $ | 16,152 | $ | 16,152 | $ | — | $ | — | |||||||||
U.S. Agency notes | 86,946 | — | 86,946 | — | |||||||||||||
U.S. Agency mortgage-backed securities | 70,721 | — | 70,721 | — | |||||||||||||
Municipal securities: | |||||||||||||||||
Non-taxable | 110,723 | — | 110,723 | — | |||||||||||||
Taxable | 22,622 | — | 22,622 | — | |||||||||||||
Mutual funds | 1,022 | 22 | 1,000 | — | |||||||||||||
Mutual funds measured at net asset value (a) | 1,517 | ||||||||||||||||
Trust preferred securities | 50 | 50 | — | — | |||||||||||||
Equity securities | 651 | 651 | — | — | |||||||||||||
Total recurring fair value measurements | $ | 310,404 | $ | 16,875 | $ | 292,012 | $ | — | |||||||||
Nonrecurring fair value measurements: | |||||||||||||||||
Impaired loans | $ | 3,712 | $ | — | $ | — | $ | 3,712 | |||||||||
December 31, 2016 | |||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||
U.S. Treasury notes | $ | 28,145 | $ | 28,145 | $ | — | $ | — | |||||||||
U.S. Agency notes | 85,400 | — | 85,400 | — | |||||||||||||
U.S. Agency mortgage-backed securities | 71,047 | — | 71,047 | — | |||||||||||||
Municipal securities: | |||||||||||||||||
Non-taxable | 113,015 | — | 113,015 | — | |||||||||||||
Taxable | 19,845 | — | 19,845 | — | |||||||||||||
Mutual fund | 1,000 | — | 1,000 | — | |||||||||||||
Mutual funds measured at net asset value (a) | 1,482 | ||||||||||||||||
Trust preferred securities | 48 | 48 | — | — | |||||||||||||
Equity securities | 677 | 677 | — | — | |||||||||||||
Total recurring fair value measurements | $ | 320,659 | $ | 28,870 | $ | 290,307 | $ | — | |||||||||
Nonrecurring fair value measurements: | |||||||||||||||||
Impaired loans | $ | 5,340 | $ | — | $ | — | $ | 5,340 | |||||||||
(a) | In accordance with FASB ASC Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated condensed balance sheets. |
Range | |||||||||||||||||
Fair Value | Valuation Technique | Unobservable Inputs | High | Low | Weighted Average | ||||||||||||
September 30, 2017 | |||||||||||||||||
Impaired loans | $ | 3,712 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | ||||||||||||
Discounted cash flows | Discount rate | 8.25 | % | 3.25 | % | 6.25 | % | ||||||||||
December 31, 2016 | |||||||||||||||||
Impaired loans | $ | 5,340 | Estimated sales price | Adjustments for comparable properties, discounts to reflect current market conditions | Not applicable | ||||||||||||
Discounted cash flows | Discount rate | 8.25 | % | 4.50 | % | 5.56 | % |
Fair Value Measurements at the End of the Reporting Period Using | ||||||||||||||||||||
Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
September 30, 2017 | ||||||||||||||||||||
FINANCIAL ASSETS: | ||||||||||||||||||||
Cash and cash equivalents | $ | 21,203 | $ | 21,203 | $ | 21,203 | $ | — | $ | — | ||||||||||
Investment securities, held-to-maturity | 36,860 | 36,805 | — | — | 36,805 | |||||||||||||||
Federal Reserve Bank stock | 2,732 | 2,732 | 2,732 | — | — | |||||||||||||||
Federal Home Loan Bank stock | 3,638 | 3,638 | 3,638 | — | — | |||||||||||||||
Loans, net | 830,797 | 808,212 | — | — | 808,212 | |||||||||||||||
Accrued interest receivable | 4,639 | 4,639 | — | 4,639 | — | |||||||||||||||
FINANCIAL LIABILITIES: | ||||||||||||||||||||
Deposits | 1,121,523 | 1,122,920 | 920,534 | 202,386 | — | |||||||||||||||
Short-term borrowings | 30,000 | 30,000 | 30,000 | — | — | |||||||||||||||
Long-term debt | 363 | 389 | — | 389 | — | |||||||||||||||
Accrued interest payable | 303 | 303 | — | 303 | — | |||||||||||||||
December 31, 2016 | ||||||||||||||||||||
FINANCIAL ASSETS: | ||||||||||||||||||||
Cash and cash equivalents | $ | 18,865 | $ | 18,865 | $ | 18,865 | $ | — | $ | — | ||||||||||
Investment securities, held-to-maturity | 41,003 | 40,490 | — | — | 40,490 | |||||||||||||||
Federal Reserve Bank stock | 2,732 | 2,732 | 2,732 | — | — | |||||||||||||||
Federal Home Loan Bank stock | 3,638 | 3,638 | 3,638 | — | — | |||||||||||||||
Loans, net | 816,228 | 799,791 | — | — | 799,791 | |||||||||||||||
Accrued interest receivable | 3,559 | 3,559 | — | 3,559 | — | |||||||||||||||
FINANCIAL LIABILITIES: | ||||||||||||||||||||
Deposits | 1,110,905 | 1,113,187 | 896,147 | 217,040 | — | |||||||||||||||
Short-term borrowings | 42,040 | 42,040 | 42,040 | — | — | |||||||||||||||
Long-term debt | 598 | 614 | — | 614 | — | |||||||||||||||
Accrued interest payable | 307 | 307 | — | 307 | — |
• | ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" |
• | ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing" |
• | ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients" |
1. | Requires most equity investments to be measured at fair value with changes in fair value recognized in net income. |
2. | Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. |
3. | Eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. |
4. | Requires use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes. |
5. | Requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. |
6. | Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. |
7. | Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. |
1. | The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. |
2. | The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. |
3. | The lease term is for the major part of the remaining economic life of the underlying asset. |
4. | The present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. |
5. | The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
1. | the success, impact, and timing of the implementation of LCNB’s business strategies; |
2. | LCNB may incur increased charge-offs in the future; |
3. | LCNB may face competitive loss of customers; |
4. | changes in the interest rate environment may have results on LCNB’s operations materially different from those anticipated by LCNB’s market risk management functions; |
5. | changes in general economic conditions and increased competition could adversely affect LCNB’s operating results; |
6. | changes in regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact LCNB’s operating results; |
7. | LCNB may experience difficulties growing loan and deposit balances; |
8. | the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations; |
9. | deterioration in the financial condition of the U.S. banking system may impact the valuations of investments LCNB has made in the securities of other financial institutions resulting in either actual losses or other-than-temporary impairments on such investments; and |
10. | the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the regulations promulgated and to be promulgated thereunder, which may subject LCNB and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses. |
Three Months Ended September 30, | ||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||
Average Outstanding Balance | Interest Earned/ Paid | Average Yield/ Rate | Average Outstanding Balance | Interest Earned/ Paid | Average Yield/ Rate | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Loans (1) | $ | 824,183 | $ | 9,095 | 4.38 | % | $ | 800,729 | $ | 8,876 | 4.41 | % | ||||||||||
Interest-bearing demand deposits | 3,638 | 21 | 2.29 | % | 14,883 | 18 | 0.48 | % | ||||||||||||||
Federal Reserve Bank stock | 2,732 | — | — | % | 2,732 | — | — | % | ||||||||||||||
Federal Home Loan Bank stock | 3,638 | 48 | 5.23 | % | 3,638 | 36 | 3.94 | % | ||||||||||||||
Investment securities: | ||||||||||||||||||||||
Taxable | 212,245 | 1,108 | 2.07 | % | 245,863 | 1,152 | 1.86 | % | ||||||||||||||
Non-taxable (2) | 144,424 | 1,205 | 3.31 | % | 144,387 | 1,236 | 3.41 | % | ||||||||||||||
Total earnings assets | 1,190,860 | 11,477 | 3.82 | % | 1,212,232 | 11,318 | 3.71 | % | ||||||||||||||
Non-earning assets | 125,940 | 114,682 | ||||||||||||||||||||
Allowance for loan losses | (3,324 | ) | (3,382 | ) | ||||||||||||||||||
Total assets | $ | 1,313,476 | $ | 1,323,532 | ||||||||||||||||||
Savings deposits | $ | 653,606 | 150 | 0.09 | % | $ | 668,007 | 167 | 0.10 | % | ||||||||||||
IRA and time certificates | 203,436 | 700 | 1.37 | % | 217,125 | 705 | 1.29 | % | ||||||||||||||
Short-term borrowings | 17,936 | 55 | 1.22 | % | 16,328 | 8 | 0.19 | % | ||||||||||||||
Long-term debt | 383 | 3 | 3.11 | % | 684 | 5 | 2.91 | % | ||||||||||||||
Total interest-bearing liabilities | 875,361 | 908 | 0.41 | % | 902,144 | 885 | 0.39 | % | ||||||||||||||
Demand deposits | 276,030 | 262,849 | ||||||||||||||||||||
Other liabilities | 12,053 | 11,168 | ||||||||||||||||||||
Capital | 150,032 | 147,371 | ||||||||||||||||||||
Total liabilities and capital | $ | 1,313,476 | $ | 1,323,532 | ||||||||||||||||||
Net interest rate spread (3) | 3.41 | % | 3.32 | % | ||||||||||||||||||
Net interest income and net interest margin on a taxable-equivalent basis (4) | $ | 10,569 | 3.52 | % | $ | 10,433 | 3.42 | % | ||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 136.04 | % | 134.37 | % |
Three Months Ended September 30, 2017 vs. 2016 Increase (decrease) due to: | ||||||||||||
Volume | Rate | Total | ||||||||||
(In thousands) | ||||||||||||
Interest-earning Assets: | ||||||||||||
Loans | $ | 259 | $ | (40 | ) | $ | 219 | |||||
Interest-bearing demand deposits | (22 | ) | 25 | 3 | ||||||||
Federal Reserve Bank stock | — | — | — | |||||||||
Federal Home Loan Bank stock | — | 12 | 12 | |||||||||
Investment securities: | ||||||||||||
Taxable | (167 | ) | 123 | (44 | ) | |||||||
Non-taxable | — | (31 | ) | (31 | ) | |||||||
Total interest income | 70 | 89 | 159 | |||||||||
Interest-bearing Liabilities: | ||||||||||||
Savings deposits | (4 | ) | (13 | ) | (17 | ) | ||||||
IRA and time certificates | (46 | ) | 41 | (5 | ) | |||||||
Short-term borrowings | 1 | 46 | 47 | |||||||||
Long-term debt | (2 | ) | — | (2 | ) | |||||||
Total interest expense | (51 | ) | 74 | 23 | ||||||||
Net interest income | $ | 121 | $ | 15 | $ | 136 |
Nine Months Ended September 30, | ||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||
Average Outstanding Balance | Interest Earned/ Paid | Average Yield/ Rate | Average Outstanding Balance | Interest Earned/ Paid | Average Yield/ Rate | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Loans (1) | $ | 816,361 | $ | 26,833 | 4.39 | % | $ | 785,807 | $ | 26,395 | 4.49 | % | ||||||||||
Interest-bearing demand deposits | 9,841 | 80 | 1.09 | % | 12,632 | 45 | 0.48 | % | ||||||||||||||
Federal Reserve Bank stock | 2,732 | 82 | 4.01 | % | 2,732 | 82 | 4.01 | % | ||||||||||||||
Federal Home Loan Bank stock | 3,638 | 131 | 4.81 | % | 3,638 | 109 | 4.00 | % | ||||||||||||||
Investment securities: | ||||||||||||||||||||||
Taxable | 216,390 | 3,350 | 2.07 | % | 250,354 | 3,528 | 1.88 | % | ||||||||||||||
Non-taxable (2) | 144,838 | 3,657 | 3.38 | % | 137,417 | 3,594 | 3.49 | % | ||||||||||||||
Total earnings assets | 1,193,800 | 34,133 | 3.82 | % | 1,192,580 | 33,753 | 3.78 | % | ||||||||||||||
Non-earning assets | 124,080 | 112,246 | ||||||||||||||||||||
Allowance for loan losses | (3,404 | ) | (3,206 | ) | ||||||||||||||||||
Total assets | $ | 1,314,476 | $ | 1,301,620 | ||||||||||||||||||
Savings deposits | $ | 655,320 | 449 | 0.09 | % | $ | 655,999 | 499 | 0.10 | % | ||||||||||||
IRA and time certificates | 209,065 | 2,090 | 1.34 | % | 217,329 | 2,066 | 1.27 | % | ||||||||||||||
Short-term borrowings | 20,450 | 97 | 0.63 | % | 17,128 | 30 | 0.23 | % | ||||||||||||||
Long-term debt | 453 | 10 | 2.95 | % | 895 | 22 | 3.28 | % | ||||||||||||||
Total interest-bearing liabilities | 885,288 | 2,646 | 0.40 | % | 891,351 | 2,617 | 0.39 | % | ||||||||||||||
Demand deposits | 271,220 | 255,314 | ||||||||||||||||||||
Other liabilities | 10,438 | 10,277 | ||||||||||||||||||||
Capital | 147,530 | 144,678 | ||||||||||||||||||||
Total liabilities and capital | $ | 1,314,476 | $ | 1,301,620 | ||||||||||||||||||
Net interest rate spread (3) | 3.42 | % | 3.39 | % | ||||||||||||||||||
Net interest income and net interest margin on a taxable-equivalent basis (4) | $ | 31,487 | 3.53 | % | $ | 31,136 | 3.49 | % | ||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 134.85 | % | 133.79 | % |
Nine Months Ended September 30, 2017 vs. 2016 Increase (decrease) due to: | ||||||||||||
Volume | Rate | Total | ||||||||||
(In thousands) | ||||||||||||
Interest-earning Assets: | ||||||||||||
Loans | $ | 1,012 | $ | (574 | ) | $ | 438 | |||||
Interest-bearing demand deposits | (12 | ) | 47 | 35 | ||||||||
Federal Reserve Bank stock | — | — | — | |||||||||
Federal Home Loan Bank stock | — | 22 | 22 | |||||||||
Investment securities: | ||||||||||||
Taxable | (506 | ) | 328 | (178 | ) | |||||||
Non-taxable | 190 | (127 | ) | 63 | ||||||||
Total interest income | 684 | (304 | ) | 380 | ||||||||
Interest-bearing Liabilities: | ||||||||||||
Savings deposits | (1 | ) | (49 | ) | (50 | ) | ||||||
IRA and time certificates | (80 | ) | 104 | 24 | ||||||||
Short-term borrowings | 7 | 60 | 67 | |||||||||
Long-term debt | (10 | ) | (2 | ) | (12 | ) | ||||||
Total interest expense | (84 | ) | 113 | 29 | ||||||||
Net interest income | $ | 768 | $ | (417 | ) | $ | 351 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2017 | 2016 | Difference | 2017 | 2016 | Difference | ||||||||||||||||||
Trust income | $ | 871 | $ | 871 | $ | — | $ | 2,604 | $ | 2,471 | $ | 133 | |||||||||||
Service charges and fees on deposit accounts | 1,352 | 1,276 | 76 | 3,886 | 3,712 | 174 | |||||||||||||||||
Net gain (loss) on sales of securities | 78 | 307 | (229 | ) | 218 | 957 | (739 | ) | |||||||||||||||
Bank owned life insurance income | 190 | 193 | (3 | ) | 676 | 553 | 123 | ||||||||||||||||
Gains from sales of loans | 34 | 73 | (39 | ) | 136 | 175 | (39 | ) | |||||||||||||||
Other operating income | 134 | 126 | 8 | 359 | 370 | (11 | ) | ||||||||||||||||
Total non-interest income | $ | 2,659 | $ | 2,846 | $ | (187 | ) | $ | 7,879 | $ | 8,238 | $ | (359 | ) |
• | Trust income increased during the nine-month period ended September 30, 2017 due to an increase in trust assets and fee adjustments. |
• | Service charges and fees on deposit accounts increased due to fee adjustments on certain services and greater customer utilization of other services. |
• | Net gains on sales of securities decreased due to a lower volume of securities sold during 2017. |
• | Bank owned life insurance income increased during the nine-month period due to mortality benefits received during the second quarter 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2017 | 2016 | Difference | 2017 | 2016 | Difference | ||||||||||||||||||
Salaries and employee benefits | $ | 4,678 | $ | 4,642 | $ | 36 | $ | 13,907 | $ | 13,737 | $ | 170 | |||||||||||
Equipment expenses | 361 | 279 | 82 | 836 | 767 | 69 | |||||||||||||||||
Occupancy expense, net | 685 | 550 | 135 | 1,889 | 1,707 | 182 | |||||||||||||||||
State franchise tax | 281 | 279 | 2 | 851 | 836 | 15 | |||||||||||||||||
Marketing | 282 | 162 | 120 | 641 | 530 | 111 | |||||||||||||||||
Amortization of intangibles | 189 | 189 | — | 562 | 564 | (2 | ) | ||||||||||||||||
FDIC insurance premiums | 108 | 168 | (60 | ) | 320 | 495 | (175 | ) | |||||||||||||||
Contracted services | 307 | 300 | 7 | 930 | 750 | 180 | |||||||||||||||||
Other real estate owned | 3 | 222 | (219 | ) | 8 | 607 | (599 | ) | |||||||||||||||
Other non-interest expense | 1,778 | 1,802 | (24 | ) | 5,307 | 5,360 | (53 | ) | |||||||||||||||
Total non-interest expense | $ | 8,672 | $ | 8,593 | $ | 79 | $ | 25,251 | $ | 25,353 | $ | (102 | ) |
• | Salaries and employee benefits increased 0.8% and 1.2% for the three and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016. These increases were primarily due to salary and wage increases, newly hired employees, and an increase in health insurance costs. These increases were partially offset by net decreases in pension expenses. |
• | Equipment expenses increased primarily due to increased depreciation on furniture and equipment and increased maintenance costs on equipment. The increased depreciation was primarily due to furniture for the new Operations Center. |
• | Occupancy expense increased primarily due to increased depreciation expense on bank premises and secondarily to increased utility costs, both primarily from the Operations Center. Rental expense for leased offices also increased, partially due to lease-required increases and partially due to rent paid for a new loan production office in Grandview Heights, Ohio. |
• | Marketing expense increased due to an expanded use of television and digital methods of advertising. |
• | FDIC insurance premiums decreased primarily due to a change in the calculation method used to determine periodic premiums. |
• | Contracted services for the nine-month period ended September 30, 2017 increased largely due to fees paid to professional placement services firms, enhanced utilization of loan review specialists, fees related to an after-hours call answering service, and costs related to moving departments from the Main Office to the Operations Center. |
• | Other real estate owned expense decreased because other real estate owned property held by LCNB during the 2017 period was minimal. |
• | Other non-interest expense for the three and nine months ended September 30, 2017 included a $144,000 charge for impairment of premises. The three and nine months ended September 30, 2017 also included $16,000 and $154,000, respectively, in organizational costs for LCNB Risk Management, Inc., a captive insurance agency incorporated by LCNB during the second quarter 2017. For the third quarter 2017, the impairment charges was more than offset by decreases in fraudulent check and check card losses, ATM expenses, and smaller decreases in other accounts. For the nine-month period ended September 30, 2017, the impairment charge and organizational costs were more than offset by the decreases in fraudulent check and check card losses, ATM expenses, and by the absence of a $251,000 penalty incurred during the first quarter 2016 to pre-pay a Federal Home Loan Bank borrowing. The borrowing bore an interest rate of 5.25% and was paid off to reduce future interest expense. |
Minimum Requirement | Minimum Requirement with Capital Conservation Buffer for 2017 | To Be Considered Well-Capitalized | |||||||
Ratio of Common Equity Tier 1 Capital to risk-weighted assets | 4.5 | % | 5.75 | % | 6.5 | % | |||
Ratio of Tier 1 Capital to risk-weighted assets | 6.0 | % | 7.25 | % | 8.0 | % | |||
Ratio of Total Capital (Tier 1 Capital plus Tier 2 Capital) to risk-weighted assets | 8.0 | % | 9.25 | % | 10.0 | % | |||
Leverage Ratio (Tier 1 Capital to adjusted quarterly average total assets) | 4.0 | % | N/A | 5.0 | % |
September 30, 2017 | December 31, 2016 | |||||||
Regulatory Capital: | ||||||||
Shareholders' equity | $ | 149,713 | $ | 142,944 | ||||
Goodwill and other intangibles | (33,058 | ) | (32,676 | ) | ||||
Accumulated other comprehensive (income) loss | 786 | 2,617 | ||||||
Tier 1 risk-based capital | 117,441 | 112,885 | ||||||
Eligible allowance for loan losses | 3,407 | 3,575 | ||||||
Total risk-based capital | $ | 120,848 | $ | 116,460 | ||||
Capital ratios: | ||||||||
Common Equity Tier 1 Capital to risk-weighted assets | 13.14 | % | 13.00 | % | ||||
Tier 1 Capital to risk-weighted assets | 13.14 | % | 13.00 | % | ||||
Total Capital to risk-weighted assets | 13.52 | % | 13.41 | % | ||||
Leverage | 9.17 | % | 8.81 | % |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Rate Shock Scenario in Basis Points | Amount | $ Change in NII | % Change in NII | |||||||
(Dollars in thousands) | ||||||||||
Up 300 | $ | 45,409 | 2,302 | 5.34 | % | |||||
Up 200 | 44,522 | 1,415 | 3.28 | % | ||||||
Up 100 | 43,789 | 682 | 1.58 | % | ||||||
Base | 43,107 | — | — | % |
Rate Shock Scenario in Basis Points | Amount | $ Change in EVE | % Change in EVE | |||||||
(Dollars in thousands) | ||||||||||
Up 300 | $ | 150,669 | (9,093 | ) | (5.69 | )% | ||||
Up 200 | 152,576 | (7,186 | ) | (4.50 | )% | |||||
Up 100 | 154,370 | (5,392 | ) | (3.38 | )% | |||||
Base | 159,762 | — | — | % |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit No. | Exhibit Description |
3.1 | |
3.2 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
10.5 | |
31.1 | |
31.2 | |
32 | |
101 | The following financial information from LCNB Corp.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 is formatted in Extensible Business Reporting Language: (i) the Consolidated Condensed Balance Sheets, (ii) the Consolidated Condensed Statements of Income, (iii) the Consolidated Condensed Statements of Comprehensive Income, (iv) the Consolidated Condensed Statements of Shareholders' Equity, (v) the Consolidated Condensed Statements of Cash Flows, and (vi) the Notes to Consolidated Condensed Financial Statements. |
LCNB Corp. | ||
November 8, 2017 | /s/ Steve P. Foster | |
Steve P. Foster | ||
Chief Executive Officer and President | ||
November 8, 2017 | /s/ Robert C. Haines, II | |
Robert C. Haines, II | ||
Executive Vice President and Chief Financial Officer |
1) | I have reviewed this quarterly report on Form 10-Q of LCNB Corp.; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Steve P. Foster | |
Steve P. Foster | |
Chief Executive Officer and President | |
November 8, 2017 |
1) | I have reviewed this quarterly report on Form 10-Q of LCNB Corp.; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Robert C. Haines, II | |
Robert C. Haines, II | |
Executive Vice President and Chief Financial Officer | |
November 8, 2017 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Steve P. Foster | /s/ Robert C. Haines, II | ||
Steve P. Foster Chief Executive Officer and President | Robert C. Haines, II Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 07, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LCNB CORP | |
Entity Central Index Key | 0001074902 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 10,018,935 |
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
SHAREHOLDERS' EQUITY: | ||
Preferred shares, no par value (in dollars per share) | ||
Preferred shares, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
Common shares, no par value (in dollars per share) | ||
Common shares, shares authorized (in shares) | 19,000,000 | 19,000,000 |
Common shares, shares issued (in shares) | 10,772,134 | 10,751,652 |
Treasury shares (in shares) | 753,627 | 753,627 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Other comprehensive income: | ||||
Net unrealized gain (loss) on available-for-sale securities, tax expense (benefit) | $ 127 | $ (357) | $ 1,021 | $ 1,975 |
Net realized (gain) loss on sale of available-for-sale securities included in net income, tax (expense) benefit | (27) | (104) | (75) | (325) |
Change in nonqualified pension plan unrecognized net loss and unrecognized prior service cost, tax benefit | $ 0 | $ 15 | $ 0 | $ 43 |
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Common stock dividends (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.48 | $ 0.48 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated condensed financial statements include LCNB Corp. ("LCNB") and its wholly-owned subsidiaries: LCNB National Bank (the "Bank") and LCNB Risk Management, Inc., a captive insurance company which was incorporated in Nevada during the second quarter 2017. All material intercompany transactions and balances are eliminated in consolidation. The unaudited interim consolidated condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation of financial position, results of operations, and cash flows for the interim periods, as required by Regulation S-X, Rule 10-01. The consolidated condensed balance sheet as of December 31, 2016 has been derived from the audited consolidated balance sheet as of that day. Certain prior period data presented in the financial statements have been reclassified to conform with the current year presentation. Accounting Standards Update ("ASU") No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," was issued by the Financial Accounting Standards Board ("FASB") in March 2016 and affects all entities that issue share-based payment awards to their employees. The new guidance involves several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU No. 2016-09, any excess tax benefits or tax deficiencies should be recognized as income tax expense or benefit in the income statement. Excess tax benefits are to be classified as an operating activity in the statement of cash flows. In accruing compensation cost, an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, as required under current guidance, or account for forfeitures when they occur. For an award to qualify for equity classification, an entity cannot partially settle the award in excess of the employer's maximum statutory withholding requirements. Such cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity in the statement of cash flows. The amendments in ASU No. 2016-09 were effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Accordingly, LCNB adopted the update as of January 1, 2017. Adoption did not have a material impact on LCNB's results of operations or financial position. ASU No. 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities," was issued by the FASB in March 2017 and applies to all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date (that is, at a premium). The ASU requires the premium to be amortized to the earliest call date, not the maturity date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. ASU No. 2017-08 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted and management elected to adopt the update as of January 1, 2017. Adoption did not have a material impact on LCNB's results of operations or financial position. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements, accounting policies, and financial notes thereto included in LCNB's 2016 Annual Report on Form 10-K filed with the SEC. |
Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The amortized cost and estimated fair value of investment securities at September 30, 2017 and December 31, 2016 are summarized as follows (in thousands):
Information concerning investment securities with gross unrealized losses at September 30, 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):
Management has determined that the unrealized losses at September 30, 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 September 30, 2017 were as follows (in thousands). Actual maturities may differ from contractual maturities when issuers have the right to call or prepay obligations.
Investment securities with a market value of $170,890,000 and $149,990,000 at September 30, 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 and nine months ended September 30, 2017 and 2016 was as follows (in thousands):
Realized gains or losses from the sale of securities are computed using the specific identification method. |
Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Loans Major classifications of loans at September 30, 2017 and December 31, 2016 are as follows (in thousands):
Loans acquired through mergers are recorded at fair value with no carryover of the acquired entity's previously established allowance for loan losses. The excess of expected cash flows over the estimated fair value of acquired loans is recognized as interest income over the remaining contractual lives of the loans using the level yield method. Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows result in the recognition of additional interest income over the then-remaining contractual lives of the loans. Impaired loans acquired are accounted for under FASB Accounting Standards Codification ("ASC") 310-30. Factors considered in evaluating whether an acquired loan was impaired include delinquency status and history, updated borrower credit status, collateral information, and updated loan-to-value information. The difference between contractually required payments at the time of acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference. The interest component of the cash flows expected to be collected is referred to as the accretable yield and is recognized as interest income over the remaining contractual life of the loan using the level yield method. Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows will result in a reclassification from the nonaccretable difference to the accretable yield. Non-accrual, past-due, and accruing restructured loans as of September 30, 2017 and December 31, 2016 are as follows (in thousands):
The allowance for loan losses for the three and nine months ended September 30, 2017 and 2016 are as follows (in thousands):
A breakdown of the allowance for loan losses and the loan portfolio by loan segment at September 30, 2017 and December 31, 2016 are as follows (in thousands):
The risk characteristics of LCNB's material loan portfolio segments are as follows: Commercial and Industrial Loans. LCNB’s commercial and industrial loan portfolio consists of loans for various purposes, including loans to fund working capital requirements (such as inventory and receivables financing) and purchases of machinery and equipment. LCNB offers a variety of commercial and industrial loan arrangements, including term loans, balloon loans, and lines of credit. Most commercial and industrial loans have a variable rate, with adjustment periods ranging from one month to five years. Adjustments are generally based on a publicly available index rate plus a margin. The margin varies based on the terms and collateral securing the loan. Commercial and industrial loans are offered to businesses and professionals for short and medium terms on both a collateralized and uncollateralized basis. Commercial and industrial loans typically are underwritten on the basis of the borrower’s ability to make repayment from the cash flow of the business. Collateral, when obtained, may include liens on furniture, fixtures, equipment, inventory, receivables, or other assets. As a result, such loans involve complexities, variables, and risks that require thorough underwriting and more robust servicing than other types of loans. Commercial, Secured by Real Estate Loans. Commercial real estate loans include loans secured by a variety of commercial, retail, and office buildings, religious facilities, multifamily (more than two-family) residential properties, construction and land development loans, and other land loans. Commercial real estate loan products generally amortize over five to twenty-five years and are payable in monthly principal and interest installments. Some have balloon payments due within one to ten years after the origination date. Many have adjustable interest rates with adjustment periods ranging from one to ten years, some of which are subject to established “floor” interest rates. Commercial real estate loans are underwritten based on the ability of the property, in the case of income producing property, or the borrower’s business to generate sufficient cash flow to amortize the debt. Secondary emphasis is placed upon global debt service, collateral value, financial strength of any guarantors, and other factors. Commercial real estate loans are generally originated with an 80% maximum loan to appraised value ratio. Residential Real Estate Loans. Residential real estate loans include loans secured by first or second mortgage liens on one to two-family residential property. Home equity lines of credit and mortgage loans secured by owner-occupied agricultural property are included in this category. First and second mortgage loans are generally amortized over five to thirty years with monthly principal and interest payments. Home equity lines of credit generally have a five year draw period with interest only payments followed by a repayment period with monthly payments based on the amount outstanding. LCNB offers both fixed and adjustable rate mortgage loans. Adjustable rate loans are available with adjustment periods ranging between one to ten years and adjust according to an established index plus a margin, subject to certain floor and ceiling rates. Home equity lines of credit have a variable rate based on the Wall Street Journal prime rate plus a margin. LCNB does not originate reverse mortgage loans or residential real estate loans generally considered to be “subprime.” Residential real estate loans are underwritten primarily based on the borrower’s ability to repay, prior credit history, and the value of the collateral. LCNB generally requires private mortgage insurance for first mortgage loans that have a loan to appraised value ratio of greater than 80%. Consumer Loans. LCNB’s portfolio of consumer loans generally includes secured and unsecured loans to individuals for household, family and other personal expenditures. Secured loans include loans to fund the purchase of automobiles, recreational vehicles, boats, and similar acquisitions. Consumer loans made by LCNB generally have fixed rates and terms ranging up to 84 months, depending upon the nature of the collateral, size of the loan, and other relevant factors. Consumer loans generally have higher interest rates, but pose additional risks of collectability and loss when compared to certain other types of loans. Collateral, if present, is generally subject to damage, wear, and depreciation. The borrower’s ability to repay is of primary importance in the underwriting of consumer loans. Agricultural Loans. LCNB’s portfolio of agricultural loans includes loans for financing agricultural production or for financing the purchase of equipment used in the production of agricultural products. LCNB’s agricultural loans are generally secured by farm machinery, livestock, crops, vehicles, or other agricultural related collateral. LCNB uses a risk-rating system to quantify loan quality. A loan is assigned to a risk category based on relevant information about the ability of the borrower to service the debt including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The categories used are:
A breakdown of the loan portfolio by credit quality indicators at September 30, 2017 and December 31, 2016 is as follows (in thousands):
A loan portfolio aging analysis at September 30, 2017 and December 31, 2016 is as follows (in thousands):
Impaired loans, including acquired credit impaired loans, at September 30, 2017 and December 31, 2016 are as follows (in thousands):
The following presents information related to the average recorded investment and interest income recognized on impaired loans, including acquired credit impaired loans, for the three and nine months ended September 30, 2017 and 2016 (in thousands):
Of the interest income recognized on impaired loans during the nine months ended September 30, 2017 and 2016, approximately $1,000 and $48,000, respectively, were recognized on a cash basis. Loan modifications that were classified as troubled debt restructurings during the three and nine months ended September 30, 2017 and 2016 are as follows (dollars in thousands):
Each restructured loan is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s ability to pay the debt as modified. Modifications may include interest only payments for a period of time, temporary or permanent reduction of the loan’s interest rate, capitalization of delinquent interest, forgiveness of principal, or extensions of the maturity date. Post-modification balances of newly restructured troubled debt by type of modification for the three and nine months ended September 30, 2017 and 2016 were as follows (dollars in thousands):
LCNB is not committed to lend additional funds to borrowers whose loan terms were modified in a troubled debt restructuring. Two commercial, secured by real estate loans to the same borrower totaling $1,236,000 that were modified during the fourth quarter 2016 subsequently defaulted in February 2017. There were no troubled debt restructurings that subsequently defaulted within twelve months of the restructuring date for the nine months ended September 30, 2016 and that remained in default at period end. No impaired loans without a valuation allowance and approximately $22,000 of impaired loans with a valuation allowance at September 30, 2017 consisted of loans that were modified during the nine months ended September 30, 2017 and were determined to be troubled debt restructurings. Approximately $681,000 of impaired loans without a valuation allowance and $78,000 of impaired loans with a valuation allowance at September 30, 2016 consisted of loans that were modified during the nine months ended September 30, 2016 and were determined to be troubled debt restructurings. Mortgage loans sold to and serviced for the Federal Home Loan Mortgage Corporation and other investors are not included in the accompanying consolidated balance sheets. The unpaid principal balances of those loans at September 30, 2017 and December 31, 2016 were approximately $96,241,000 and $100,982,000, respectively. The total recorded investment in residential consumer mortgage loans secured by residential real estate that were in the process of foreclosure at September 30, 2017 was $688,000. |
Acquired Credit Impaired Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Credit Impaired Loans | Acquired Credit Impaired Loans The following table provides at September 30, 2017 and December 31, 2016 the major classifications of acquired credit impaired loans that are accounted for in accordance with FASB ASC 310-30 (in thousands):
The following table provides the outstanding balance and related carrying amount for acquired credit impaired loans at the dates indicated (in thousands):
Activity during the nine months ended September 30, 2017 and 2016 for the accretable discount related to acquired credit impaired loans is as follows (in thousands):
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Affordable Housing Tax Credit Limited Partnership |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Affordable Housing Tax Credit Limited Partnership | Affordable Housing Tax Credit Limited Partnership LCNB is a limited partner in limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit ("LIHTC") pursuant to Section 42 of the Internal Revenue Code. The purpose of the investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. The following table presents the balances of LCNB's affordable housing tax credit investments, included in other assets in the consolidated condensed balance sheets, and related unfunded commitments, included in accrued interest and other liabilities in the consolidated condensed balance sheets, at September 30, 2017 and December 31, 2016 (in thousands):
LCNB expects to fund the unfunded commitment over 10.0 years. The following table presents other information relating to LCNB's affordable housing tax credit investments for the nine months ended September 30, 2017 and 2016 (in thousands):
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings Short-term borrowings at September 30, 2017 and December 31, 2016 are as follows (dollars in thousands):
The repurchase agreements product was discontinued during the third quarter 2017. Repurchase agreements were an option customers could use in managing their cash positions and matured the next business day after issuance. Repurchase agreements at December 31, 2016 were fully secured by U.S. Agency notes and such collateral securities were held by the Federal Reserve Bank. All advances from the Federal Home Loan Bank ("FHLB") of Cincinnati, both long-term and short-term, are secured by a blanket pledge of LCNB's 1-4 family first lien mortgage loans in the amount of approximately $219 million and $229 million at September 30, 2017 and December 31, 2016, respectively. Additionally, LCNB is required to hold minimum levels of FHLB stock, based on the outstanding borrowings. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes A reconciliation between the statutory income tax and LCNB's effective tax rate on income from continuing operations follows:
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Commitments and Contingent Liabilities |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities LCNB is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. They involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. Exposure to credit loss in the event of nonperformance by the other parties to financial instruments for commitments to extend credit is represented by the contract amount of those instruments. The Bounce Protection product, a customer deposit overdraft program, is offered as a service and does not constitute a contract between the customer and LCNB. LCNB uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Financial instruments whose contract amounts represent off-balance-sheet credit risk at September 30, 2017 and December 31, 2016 are as follows (in thousands):
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Unused lines of credit include amounts not drawn on line of credit loans. Commitments to extend credit and unused lines of credit generally have fixed expiration dates or other termination clauses. LCNB evaluates each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management's credit evaluation of the borrower. Collateral held varies, but may include accounts receivable, inventory, residential realty, income-producing commercial property, and property, plant, and equipment. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees generally are fully secured and have varying maturities. Capital expenditures include the construction or acquisition of new office buildings, improvements to LCNB's offices, purchases of furniture and equipment, and additions or improvements to LCNB's information technology system. Commitments outstanding for capital expenditures as of September 30, 2017 totaled approximately $60,000. Management believes that LCNB has sufficient liquidity to fund its lending and capital expenditure commitments. LCNB and its subsidiaries are parties to various claims and proceedings arising in the normal course of business. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from such proceedings and claims will not be material to the consolidated financial position or results of operations. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) for the nine months ended September 30, 2017 and the year ended December 31, 2016 are as follows (in thousands):
Reclassifications out of accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2017 and 2016 and the affected line items in the consolidated condensed statements of income are as follows (in thousands):
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Retirement Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement Plans LCNB participates in a noncontributory defined benefit multi-employer retirement plan that covers substantially all regular full-time employees hired before January 1, 2009. Employees hired before this date who received a benefit reduction under certain amendments to the defined benefit retirement plan receive an automatic contribution of 5% or 7% of their annual compensation, depending on the sum of an employee's age and vesting service, into their defined contribution plans (401(k) plans), regardless of the contributions made by the employees. These contributions are made annually and these employees do not receive any employer matches to their 401(k) contributions. Employees hired on or after January 1, 2009 receive a 50% employer match on their contributions into the 401(k) plan, up to a maximum LCNB contribution of 3% of each individual employee's annual compensation. Funding and administrative costs of the qualified noncontributory defined benefit retirement plan and 401(k) plan charged to pension and other employee benefits in the consolidated condensed statements of income for the three and nine-month periods ended September 30, 2017 and 2016 are as follows (in thousands):
Certain highly compensated employees participate in a nonqualified defined benefit retirement plan. The nonqualified plan ensures that participants receive the full amount of benefits to which they would have been entitled under the noncontributory defined benefit retirement plan in the absence of limits on benefit levels imposed by certain sections of the Internal Revenue Code. The components of net periodic pension cost of the nonqualified defined benefit retirement plan for the three and nine months ended September 30, 2017 and 2016 are summarized as follows (in thousands):
Amounts recognized in accumulated other comprehensive income (loss), net of tax, at September 30, 2017 and December 31, 2016 for the nonqualified defined benefit retirement plan consists of (in thousands):
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Stock Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation | Stock Based Compensation LCNB established an Ownership Incentive Plan (the "2002 Plan") during 2002 that allowed for stock-based awards to eligible employees, as determined by the Board of Directors. The awards were made in the form of stock options, share awards, and/or appreciation rights. The 2002 Plan provided for the issuance of up to 200,000 shares of common stock. The 2002 Plan expired on April 16, 2012. Any outstanding unexercised options, however, continue to be exercisable in accordance with their terms. The 2015 Ownership Incentive Plan (the "2015 Plan") was ratified by LCNB's shareholders at the annual meeting on April 28, 2015 and allows for stock-based awards to eligible employees, as determined by the Compensation Committee of the Board of Directors. Awards may be made in the form of stock options, appreciation rights, restricted shares, and/or restricted share units. The 2015 Plan provides for the issuance of up to 450,000 shares of common stock. The 2015 Plan will terminate on April 28, 2025 and is subject to earlier termination by the Compensation Committee. Stock-based awards may be in the form of treasury shares or newly issued shares. LCNB has not granted stock option awards since 2012. Options granted to date under the 2002 Plan vest ratably over a five-year period and expire ten years after the date of grant. Stock options outstanding at September 30, 2017 were as follows:
The following table summarizes stock option activity for the periods indicated:
The following table provides information related to stock options exercised during the periods indicated (in thousands):
The aggregate intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) for options outstanding and exercisable at September 30, 2017 that were "in the money" (market price greater than exercise price) was $193,000. The aggregate intrinsic value for options outstanding at September 30, 2016 that were in the money was $149,000 and the aggregate intrinsic value at that date for only the options that were exercisable was $140,000. The intrinsic value changes based upon fluctuations in the market value of LCNB's common stock. Total expense related to options included in salaries and employee benefits for the three and nine months ended September 30, 2017 was $0 and $1,000, respectively. The related tax benefit for the three and nine months ended September 30, 2017 was $0 and $0, respectively. Compensation cost related to option awards was recognized in full during the first quarter 2017. Total expense related to options included in salaries and employee benefits for the three and nine months ended September 30, 2016 was $2,000 and $4,000, respectively. The related tax benefit for the three and nine months ended September 30, 2016 was $0 and $1,000, respectively. Restricted stock awards granted under the 2015 Plan were as follows:
Total expense related to restricted stock awards included in salaries and wages in the consolidated condensed statements of income for the three and nine months ended September 30, 2017 was $6,000 and $69,000, respectively. The related tax benefit for the three and nine months ended September 30, 2017 was $2,000 and $24,000, respectively. Unrecognized compensation expense for restricted stock awards was $90,000 at September 30, 2017 and is expected to be recognized over a period of 4.08 years. Total expense related to restricted stock awards included in salaries and wages in the consolidated condensed statements of income for the three and nine months ended September 30, 2016 was $23,000 and $68,000, respectively. The related tax benefit for the three and nine months ended September 30, 2016 was $8,000 and $23,000, respectively. |
Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings per Common Share LCNB has granted restricted stock awards with non-forfeitable dividend rights, which are considered participating securities. Accordingly, earnings per share is computed using the two-class method as required by FASB ASC 260-10-45. Basic earnings per common share is calculated by dividing net income allocated to common shareholders by the weighted average number of common shares outstanding during the period, which excludes the participating securities. Diluted earnings per common share is adjusted for the dilutive effects of stock options, warrants, and restricted stock. The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options and warrants with proceeds used to purchase treasury shares at the average market price for the period. Earnings per share for the three and nine months ended September 30, 2017 and 2016 were calculated as follows (dollars in thousands, except share and per share data):
Options to purchase 0 and 2,516 shares of common stock at a weighted average price of $0.00 and $17.88 per share were outstanding at September 30, 2017 and 2016, respectively, but were not included in the computation of diluted earnings per common share because the exercise prices of the options were greater than the average market price of the common shares. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements LCNB measures certain assets at fair value using various valuation techniques and assumptions, depending on the nature of the asset. Fair value is defined as the price that would be received from the sale of an asset in an orderly transaction between market participants at the measurement date. The inputs to the valuation techniques used to measure fair value are assigned to one of three broad levels:
The majority of LCNB's financial debt securities are classified as available-for-sale. The securities are reported at fair value with unrealized holding gains and losses reported net of income taxes in accumulated other comprehensive income (loss). LCNB utilizes a pricing service for determining the fair values of most of its investment securities. Methods and significant assumptions used to estimate fair value are as follows:
Assets that may be recorded at fair value on a nonrecurring basis include impaired loans, other real estate owned, and other repossessed assets. A loan is considered impaired when management believes it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Impaired loans are carried at the present value of estimated future cash flows using the loan's existing rate or the fair value of collateral if the loan is collateral dependent, if this value is less than the loan balance. These inputs are considered to be level 3. Other real estate owned is adjusted to fair value upon transfer of the loan to foreclosed assets, usually based on an appraisal of the property. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. These inputs are also considered to be level 3. The following table summarizes the valuation of LCNB's assets recorded at fair value by input levels as of September 30, 2017 and December 31, 2016 (in thousands):
The following table presents quantitative information about unobservable inputs used in nonrecurring level 3 fair value measurements at September 30, 2017 and December 31, 2016 (dollars in thousands):
Carrying amounts and estimated fair values of financial instruments as of September 30, 2017 and December 31, 2016 are as follows (in thousands):
The fair values of off-balance-sheet financial instruments such as loan commitments and letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements. The fair values of such instruments were not material at September 30, 2017 and December 31, 2016. Fair values of financial instruments are based on various assumptions, including the discount rate and estimates of future cash flows. Therefore, the fair values presented may not represent amounts that could be realized in actual transactions. In addition, because the required disclosures exclude certain financial instruments and all nonfinancial instruments, any aggregation of the fair value amounts presented would not represent the underlying value of LCNB. The following methods and assumptions were used to estimate the fair value of certain financial instruments: Cash and cash equivalents The carrying amounts presented are deemed to approximate fair value. Investment securities, held-to-maturity Fair values for investment securities, held-to-maturity are based on quoted market prices for similar securities and/or discounted cash flow analysis or other methods. Federal Home Loan Bank stock and Federal Reserve Bank stock The carrying value of Federal Home Loan Bank and Federal Reserve Bank stock approximates fair value based on the respective redemptive provisions. Loans Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, incorporating assumptions of current and projected prepayment speeds. These current rates approximate market rates. Deposits The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities, which approximates market rates. Borrowings The carrying amounts of federal funds purchased, repurchase agreements, and U.S. Treasury demand note borrowings are deemed to approximate fair value of short-term borrowings. For long-term debt, fair values are estimated based on the discounted value of expected net cash flows using current interest rates. Accrued interest receivable and Accrued interest payable Carrying amount approximates fair value. |
Recent Accounting Pronouncements |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time the FASB issues an ASU to communicate changes to U.S. generally accepted accounting principles. The following information provides brief summaries of newly issued but not yet effective ASUs that could have an effect on LCNB’s financial position or results of operations: ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ASU No. 2014-09 was issued in May 2014 and supersedes most current revenue recognition guidance for contracts to transfer goods or services or other nonfinancial assets. Lease contracts, insurance contracts, and most financial instruments are not included in the scope of this update. ASU No. 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Additional disclosures providing information about contracts with customers are required. Guidance in ASU No. 2014-09 has been clarified by the following ASUs:
As extended by ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," ASU No. 2014-09 and the clarifying ASUs are effective for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Transitional guidance is included in the updates. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. LCNB's revenue is primarily comprised of net interest income, which is explicitly excluded from the scope of ASU No. 2014-09, and non-interest income. The update may require LCNB to change how it recognizes certain recurring revenue streams related to non-interest income. However, it is not expected to have a material impact on LCNB's results of operations or financial position. Management continues to monitor the guidance from the FASB and the Transition Resource Group for Revenue Recognition in determining the impact of ASU No. 2014-09 on various types of non-interest income. Management is currently evaluating the revenue streams that will be impacted by the amendments. The analysis includes identification of possible contract performance obligations and recognition principles. Adoption of ASU No. 2014-09 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ASU No. 2016-01 was issued in January 2016 and applies to all entities that hold financial assets or owe financial liabilities. It makes targeted changes to generally accepted accounting principles for public companies as follows:
For public business entities, the new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Adoption of ASU No. 2016-01 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2016-02, "Leases (Topic 842)" ASU No. 2016-02 was issued in February 2016 and requires a lessee to recognize in the statement of financial position a liability to make lease payments ("the lease liability") and a right-of-use asset representing its right to use the underlying asset for the lease term, initially measured at the present value of the lease payments. When measuring assets and liabilities arising from a lease, the lessee should include payments to be made in optional periods only if the lessee is reasonably certain, as defined, to exercise an option to the lease or not to exercise an option to terminate the lease. Optional payments to purchase the underlying asset should be included if the lessee is reasonably certain it will exercise the purchase option. Most variable lease payments should be excluded except for those that depend on an index or a rate or are in substance fixed payments. A lessee shall classify a lease as a finance lease if it meets any of five listed criteria:
For finance leases, a lessee shall recognize in the statement of income interest on the lease liability separately from amortization of the right-of-use asset. Amortization of the right-of-use asset shall be on a straight-line basis, unless another basis is more representative of the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits. If the lease does not meet any of the five criteria, the lessee shall classify it as an operating lease and shall recognize a single lease cost on a straight-line basis over the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments in this update are to be applied using a modified retrospective approach, as defined, and are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. LCNB estimates that it will recognize discounted right-of-use assets and lease liabilities totaling approximately $5 million for current leases outstanding. This projection is based on various assumptions, including the level of interest rates and no significant increases in leasing activity, that may change between now and the effective date. ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ASU No. 2016-13 was issued in June 2016 and, once effective, will significantly change current guidance for recognizing impairment of financial instruments. Current guidance requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU No. 2016-13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. ASU No. 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Under the new guidance, entities will determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Any credit loss will be recognized as an allowance for credit losses on available-for-sale debt securities rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result, entities will recognize improvements to estimated credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time, as currently required. ASU No. 2016-13 eliminates the current accounting model for purchased credit impaired loans and debt securities. Instead, purchased financial assets with credit deterioration will be recorded gross of estimated credit losses as of the date of acquisition and the estimated credit losses amounts will be added to the allowance for credit losses. Thereafter, entities will account for additional impairment of such purchased assets using the models listed above. ASU No. 2016-13 will take effect for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. While LCNB's Loan Committee expects that the implementation of ASU No. 2016-13 will increase the balance of the allowance for loan losses, it is continuing to evaluate the potential impact on LCNB's results of operations and financial position. The Loan Committee is currently analyzing its data collection efforts, pool segmentation, and reporting mechanisms to prepare for adoption of this ASU. The financial statement impact of this new standard cannot be reasonably estimated at this time. ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ASU No. 2017-04 was issued in January 2017 and applies to public and other entities that have goodwill reported in their financial statements. To simplify the subsequent measurement of goodwill, this ASU eliminates Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, including unrecognized assets and liabilities, following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is an SEC filer should adopt the amendments in this update on a prospective basis for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Adoption of ASU No. 2017-04 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ASU No. 2017-07 was issued in March 2017 and applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715. The amendments in this update require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost, as defined, are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in ASU No. 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in this update are to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement. Adoption of ASU No. 2017-07 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting" ASU No. 2017-09 was issued in May 2017 and applies to any entity that changes the terms or conditions of a share-based payment award. The amendments in this update provide that an entity would not apply modification accounting under the guidance in Topic 718 if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The amendments are to be applied prospectively and are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. Adoption of ASU No. 2017-09 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" ASU No. 2017-12 was issued in August 2017 and applies to any entity that elects to apply hedge accounting in accordance with current generally accepted accounting principles. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components. The amendments are effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted. LCNB does not currently own any instruments within the scope of ASU No. 2017-12 and its adoption is not expected to have a material impact on its results of operations or financial position. |
Recent Accounting Pronouncements (Policies) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time the FASB issues an ASU to communicate changes to U.S. generally accepted accounting principles. The following information provides brief summaries of newly issued but not yet effective ASUs that could have an effect on LCNB’s financial position or results of operations: ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ASU No. 2014-09 was issued in May 2014 and supersedes most current revenue recognition guidance for contracts to transfer goods or services or other nonfinancial assets. Lease contracts, insurance contracts, and most financial instruments are not included in the scope of this update. ASU No. 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Additional disclosures providing information about contracts with customers are required. Guidance in ASU No. 2014-09 has been clarified by the following ASUs:
As extended by ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," ASU No. 2014-09 and the clarifying ASUs are effective for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Transitional guidance is included in the updates. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. LCNB's revenue is primarily comprised of net interest income, which is explicitly excluded from the scope of ASU No. 2014-09, and non-interest income. The update may require LCNB to change how it recognizes certain recurring revenue streams related to non-interest income. However, it is not expected to have a material impact on LCNB's results of operations or financial position. Management continues to monitor the guidance from the FASB and the Transition Resource Group for Revenue Recognition in determining the impact of ASU No. 2014-09 on various types of non-interest income. Management is currently evaluating the revenue streams that will be impacted by the amendments. The analysis includes identification of possible contract performance obligations and recognition principles. Adoption of ASU No. 2014-09 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ASU No. 2016-01 was issued in January 2016 and applies to all entities that hold financial assets or owe financial liabilities. It makes targeted changes to generally accepted accounting principles for public companies as follows:
For public business entities, the new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Adoption of ASU No. 2016-01 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2016-02, "Leases (Topic 842)" ASU No. 2016-02 was issued in February 2016 and requires a lessee to recognize in the statement of financial position a liability to make lease payments ("the lease liability") and a right-of-use asset representing its right to use the underlying asset for the lease term, initially measured at the present value of the lease payments. When measuring assets and liabilities arising from a lease, the lessee should include payments to be made in optional periods only if the lessee is reasonably certain, as defined, to exercise an option to the lease or not to exercise an option to terminate the lease. Optional payments to purchase the underlying asset should be included if the lessee is reasonably certain it will exercise the purchase option. Most variable lease payments should be excluded except for those that depend on an index or a rate or are in substance fixed payments. A lessee shall classify a lease as a finance lease if it meets any of five listed criteria:
For finance leases, a lessee shall recognize in the statement of income interest on the lease liability separately from amortization of the right-of-use asset. Amortization of the right-of-use asset shall be on a straight-line basis, unless another basis is more representative of the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits. If the lease does not meet any of the five criteria, the lessee shall classify it as an operating lease and shall recognize a single lease cost on a straight-line basis over the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments in this update are to be applied using a modified retrospective approach, as defined, and are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. LCNB estimates that it will recognize discounted right-of-use assets and lease liabilities totaling approximately $5 million for current leases outstanding. This projection is based on various assumptions, including the level of interest rates and no significant increases in leasing activity, that may change between now and the effective date. ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ASU No. 2016-13 was issued in June 2016 and, once effective, will significantly change current guidance for recognizing impairment of financial instruments. Current guidance requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU No. 2016-13 replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. ASU No. 2016-13 also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Under the new guidance, entities will determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Any credit loss will be recognized as an allowance for credit losses on available-for-sale debt securities rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result, entities will recognize improvements to estimated credit losses on available-for-sale debt securities immediately in earnings rather than as interest income over time, as currently required. ASU No. 2016-13 eliminates the current accounting model for purchased credit impaired loans and debt securities. Instead, purchased financial assets with credit deterioration will be recorded gross of estimated credit losses as of the date of acquisition and the estimated credit losses amounts will be added to the allowance for credit losses. Thereafter, entities will account for additional impairment of such purchased assets using the models listed above. ASU No. 2016-13 will take effect for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. While LCNB's Loan Committee expects that the implementation of ASU No. 2016-13 will increase the balance of the allowance for loan losses, it is continuing to evaluate the potential impact on LCNB's results of operations and financial position. The Loan Committee is currently analyzing its data collection efforts, pool segmentation, and reporting mechanisms to prepare for adoption of this ASU. The financial statement impact of this new standard cannot be reasonably estimated at this time. ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ASU No. 2017-04 was issued in January 2017 and applies to public and other entities that have goodwill reported in their financial statements. To simplify the subsequent measurement of goodwill, this ASU eliminates Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, including unrecognized assets and liabilities, following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is an SEC filer should adopt the amendments in this update on a prospective basis for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Adoption of ASU No. 2017-04 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ASU No. 2017-07 was issued in March 2017 and applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715. The amendments in this update require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost, as defined, are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in ASU No. 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in this update are to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement. Adoption of ASU No. 2017-07 is not expected to have a material impact on LCNB's results of operations or financial position. ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting" ASU No. 2017-09 was issued in May 2017 and applies to any entity that changes the terms or conditions of a share-based payment award. The amendments in this update provide that an entity would not apply modification accounting under the guidance in Topic 718 if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The amendments are to be applied prospectively and are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. Adoption of ASU No. 2017-09 is not expected to have a material impact on LCNB's results of operations or financial position. |
Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Fair Value of Available-for-Sale Investment Securities | The amortized cost and estimated fair value of investment securities at September 30, 2017 and December 31, 2016 are summarized as follows (in thousands):
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Securities in a Continuous Loss Position | Information concerning investment securities with gross unrealized losses at September 30, 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):
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Investments Classified by Contractual Maturity Date | Contractual maturities of investment securities at September 30, 2017 were as follows (in thousands). Actual maturities may differ from contractual maturities when issuers have the right to call or prepay obligations.
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Realized Gain (Loss) on Investments | Certain information concerning the sale of investment securities available-for-sale for the three and nine months ended September 30, 2017 and 2016 was as follows (in thousands):
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Loans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major Classifications of Loans | Major classifications of loans at September 30, 2017 and December 31, 2016 are as follows (in thousands):
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Non-accrual, Past Due, and Accruing Restructured Loans | Non-accrual, past-due, and accruing restructured loans as of September 30, 2017 and December 31, 2016 are as follows (in thousands):
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Allowance for Loan Losses and Recorded Investments in Loans | The allowance for loan losses for the three and nine months ended September 30, 2017 and 2016 are as follows (in thousands):
A breakdown of the allowance for loan losses and the loan portfolio by loan segment at September 30, 2017 and December 31, 2016 are as follows (in thousands):
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Analysis of the Company's Loan Portfolio by Credit Quality Indicators | A breakdown of the loan portfolio by credit quality indicators at September 30, 2017 and December 31, 2016 is as follows (in thousands):
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Loan Portfolio Aging Analysis | A loan portfolio aging analysis at September 30, 2017 and December 31, 2016 is as follows (in thousands):
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Impaired Loans | Impaired loans, including acquired credit impaired loans, at September 30, 2017 and December 31, 2016 are as follows (in thousands):
The following presents information related to the average recorded investment and interest income recognized on impaired loans, including acquired credit impaired loans, for the three and nine months ended September 30, 2017 and 2016 (in thousands):
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Troubled Debt Restructurings | Loan modifications that were classified as troubled debt restructurings during the three and nine months ended September 30, 2017 and 2016 are as follows (dollars in thousands):
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Schedule of Troubled Debt Restructurings by Modification Type | Post-modification balances of newly restructured troubled debt by type of modification for the three and nine months ended September 30, 2017 and 2016 were as follows (dollars in thousands):
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Acquired Credit Impaired Loans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Carrying Values Of Certain Loans Acquired In A Transfer Not Accounted For As Debt Securities | The following table provides at September 30, 2017 and December 31, 2016 the major classifications of acquired credit impaired loans that are accounted for in accordance with FASB ASC 310-30 (in thousands):
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Outstanding and related carrying amount for acquired impaired loans | The following table provides the outstanding balance and related carrying amount for acquired credit impaired loans at the dates indicated (in thousands):
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Accretable discount related to acquired impaired loans | Activity during the nine months ended September 30, 2017 and 2016 for the accretable discount related to acquired credit impaired loans is as follows (in thousands):
|
Affordable Housing Tax Credit Limited Partnership (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Affordable Housing Program Obligation | The following table presents the balances of LCNB's affordable housing tax credit investments, included in other assets in the consolidated condensed balance sheets, and related unfunded commitments, included in accrued interest and other liabilities in the consolidated condensed balance sheets, at September 30, 2017 and December 31, 2016 (in thousands):
LCNB expects to fund the unfunded commitment over 10.0 years. The following table presents other information relating to LCNB's affordable housing tax credit investments for the nine months ended September 30, 2017 and 2016 (in thousands):
|
Borrowings (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term borrowings | Short-term borrowings at September 30, 2017 and December 31, 2016 are as follows (dollars in thousands):
|
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation between Statutory Income Tax and Effective Tax Rate | A reconciliation between the statutory income tax and LCNB's effective tax rate on income from continuing operations follows:
|
Commitments and Contingent Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Whose Contract Amounts Represent Off-Balance-Sheet Credit Risk | Financial instruments whose contract amounts represent off-balance-sheet credit risk at September 30, 2017 and December 31, 2016 are as follows (in thousands):
|
Accumulated Other Comprehensive Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income | Changes in accumulated other comprehensive income (loss) for the nine months ended September 30, 2017 and the year ended December 31, 2016 are as follows (in thousands):
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Schedule of Reclassifications Out of Accumulated Other Comprehensive Income | Reclassifications out of accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2017 and 2016 and the affected line items in the consolidated condensed statements of income are as follows (in thousands):
|
Retirement Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Funding and Administrative Cost of Qualified Noncontributory Defined Benefit Retirement Plan and 401(k) Plan Charged to Salaries and Employee Benefits | Funding and administrative costs of the qualified noncontributory defined benefit retirement plan and 401(k) plan charged to pension and other employee benefits in the consolidated condensed statements of income for the three and nine-month periods ended September 30, 2017 and 2016 are as follows (in thousands):
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Components of Net Periodic Pension Cost of Nonqualified Defined Benefit Retirement Plan | The components of net periodic pension cost of the nonqualified defined benefit retirement plan for the three and nine months ended September 30, 2017 and 2016 are summarized as follows (in thousands):
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Amount Recognized in Accumulated Other Comprehensive Income, Net of Deferred Federal Income Taxes for Nonqualified Defined Retirement Plan | Amounts recognized in accumulated other comprehensive income (loss), net of tax, at September 30, 2017 and December 31, 2016 for the nonqualified defined benefit retirement plan consists of (in thousands):
|
Stock Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Options Outstanding | Stock options outstanding at September 30, 2017 were as follows:
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Summary of Stock Option Activity | The following table summarizes stock option activity for the periods indicated:
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Summary of Restricted Stock Awards Activity | Restricted stock awards granted under the 2015 Plan were as follows:
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Schedule of Information Related to Stock Options Exercised | The following table provides information related to stock options exercised during the periods indicated (in thousands):
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Earnings Per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations of Earnings per Common Share | Earnings per share for the three and nine months ended September 30, 2017 and 2016 were calculated as follows (dollars in thousands, except share and per share data):
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Valuation of LCNB's Assets Recorded at Fair Value by Inputs Level | The following table summarizes the valuation of LCNB's assets recorded at fair value by input levels as of September 30, 2017 and December 31, 2016 (in thousands):
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Fair Value Measurements Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques | The following table presents quantitative information about unobservable inputs used in nonrecurring level 3 fair value measurements at September 30, 2017 and December 31, 2016 (dollars in thousands):
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Carrying Amounts and Estimated Fair Values of Financial Instruments | Carrying amounts and estimated fair values of financial instruments as of September 30, 2017 and December 31, 2016 are as follows (in thousands):
|
Investment Securities, Sales (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales | $ 14,164 | $ 25,723 | $ 26,407 | $ 62,252 |
Gross realized gains | 78 | 307 | 218 | 978 |
Gross realized losses | $ 0 | $ 0 | $ 0 | $ 21 |
Acquired Credit Impaired Loans, Outstanding Balance and Carrying Value for Acquired Credit Impaired Loans (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract] | ||
Outstanding balance | $ 10,346 | $ 12,289 |
Carrying amount | $ 8,069 | $ 9,346 |
Acquired Credit Impaired Loans, Accretable Yield Related To Acquired Credit Impaired Loans (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Accretable discount at beginning of year | $ 1,080 | $ 1,503 |
Reclassification from nonaccretable discount to accretable discount | 160 | 307 |
Less disposals | (170) | (3) |
Less accretion | (257) | (439) |
Accretable discount at end of period | $ 813 | $ 1,368 |
Affordable Housing Tax Credit Limited Partnership (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Equity Method Investments and Joint Ventures [Abstract] | |||
Affordable housing tax credit investment | $ 3,000 | $ 2,000 | |
Less amortization | 220 | 93 | |
Net affordable housing tax credit investment | 2,780 | 1,907 | |
Unfunded commitment | $ 2,372 | $ 1,617 | |
Funding period for unfunded commitment (in years) | 10 years | ||
Tax credits and other tax benefits recognized | $ 119 | $ 83 | |
Tax credit amortization expense included in provision for income taxes | $ 126 | $ 62 |
Borrowings (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Short-term Debt [Line Items] | ||
Short-term borrowings, amount | $ 30,000 | $ 42,040 |
Short-term borrowings, interest rate | 1.18% | 0.42% |
Pledged financial instruments, securities for federal home loan bank | $ 219,000 | $ 229,000 |
FHLB short-term advance [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings, amount | $ 30,000 | $ 25,000 |
Short-term borrowings, interest rate | 1.18% | 0.63% |
Repurchase agreements [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings, amount | $ 0 | $ 17,040 |
Short-term borrowings, interest rate | 0.00% | 0.10% |
Income Taxes (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Statutory tax rate | 35.00% | 34.20% | 35.00% | 34.20% |
Increase (decrease) resulting from: | ||||
Tax exempt interest | (6.40%) | (7.00%) | (6.40%) | (6.60%) |
Tax exempt income on bank owned life insurance | (1.60%) | (1.70%) | (1.90%) | (1.60%) |
Other, net | (1.90%) | 0.10% | (0.90%) | 0.00% |
Effective tax rate | 25.10% | 25.60% | 25.80% | 26.00% |
Stock Based Compensation, Stock Option Activity (Details) - Stock Options [Member] - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Options outstanding [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 24,669 | 83,861 |
Exercised (in shares) | (3,398) | (51,390) |
Expired (in shares) | (1,006) | (7,802) |
Outstanding at end of period (in shares) | 20,265 | 24,669 |
Exercisable at end of period (in shares) | 20,265 | 22,924 |
Weighted average exercise price [Roll forward] | ||
Outstanding at beginning of period (in dollars per share) | $ 12.17 | $ 12.39 |
Exercised (in dollars per share) | 14.94 | 11.53 |
Expired (in dollars per share) | 17.88 | 18.76 |
Outstanding at end of period (in dollars per share) | 11.42 | 12.17 |
Exercisable at end of period (in dollars per share) | $ 11.42 | $ 12.13 |
Stock Based Compensation , Information Related to Stock Options Exercised (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Intrinsic value of options exercised | $ 25 | $ 288 |
Cash received from options exercised | 51 | 592 |
Tax benefit realized from options exercised | $ 5 | $ 59 |
Stock Based Compensation , Restricted Stock Activity (Details) - Restricted Stock Awards [Member] - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Shares | ||
Outstanding at beginning of period (in shares) | 8,624 | 16,038 |
Granted (in shares) | 4,027 | 0 |
Vested (in shares) | 2,011 | 5,255 |
Forfeited (in shares) | 0 | 0 |
Outstanding at end of period (in shares) | 10,640 | 10,783 |
Weighted Average Grant Date Fair Value | ||
Outstanding at beginning of period (usd per share) | $ 15.47 | $ 15.47 |
Granted (usd per share) | 22.60 | 0.00 |
Vested (usd per share) | 17.87 | 15.47 |
Forfeited (usd per share) | 0.00 | 0.00 |
Outstanding at end of period (usd per share) | $ 17.71 | $ 15.47 |
Earnings Per Common Share, Additional Information (Details) - Options to purchase common stock [Member] - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options excluded from computation of earnings per share (in shares) | 0 | 2,516 |
Weighted average price (in dollars per share) | $ 0.00 | $ 17.88 |
Fair Value Measurements, Quantitative Information About Unobservable Inputs Used In Recurring And Nonrecurring Level 3 Inputs (Details) - Nonrecurring [Member] - Impaired loans [Member] - Level 3 [Member] - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 3,712 | $ 5,340 |
High [Member] | Discounted Cash Flows [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 8.25% | 8.25% |
Low [Member] | Discounted Cash Flows [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 3.25% | 4.50% |
Weighted Average [Member] | Discounted Cash Flows [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 6.25% | 5.56% |
Recent Accounting Pronouncements (Details) - Accounting Standards Update 2016-02 - Forecast $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right of use asset | $ 5 |
Lease liabilities | $ 5 |
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