INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

The amortized cost and estimated fair value of equity and debt securities at December 31 are summarized as follows (in thousands):


	Amortized Cost		Unrealized Gains	Unrealized Losses	Fair Value
2020
Debt Securities Available-for-Sale:
U.S. Treasury notes	$	2,268	120	—	2,388
U.S. Agency notes	66,983		950	33	67,900
Corporate Bonds	1,200		—	21	1,179
U.S. Agency mortgage-backed securities	88,455		3,180	1	91,634

Municipal securities:
Non-taxable	12,651		282	—	12,933
Taxable	32,409		1,031	3	33,437
	$	203,966	5,563	58	209,471

Debt Securities Held-to-Maturity:
Municipal securities:
Non-taxable	$	21,408	181	—	21,589
Taxable	3,402		6	37	3,371
	$	24,810	187	37	24,960

2019
Debt Securities Available-for-Sale:
U.S. Treasury notes	$	2,273	36	—	2,309
U.S. Agency notes	48,745		273	34	48,984
U.S. Agency mortgage-backed securities	83,977		672	243	84,406

Municipal securities:
Non-taxable	22,174		161	14	22,321
Taxable	19,746		269	35	19,980
	$	176,915	1,411	326	178,000

Debt Securities Held-to-Maturity:
Municipal securities:
Non-taxable	$	24,300	343	5	24,638
Taxable	3,225		25	—	3,250
	$	27,525	368	5	27,888

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


	Less Than Twelve Months			Twelve Months or More
	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses
2020
Available-for-Sale:

U.S. Agency notes	$	10,674	33	—	—
Corporate Bonds	679		21	—	—
U.S. Agency mortgage-backed securities	290		1	—	—
Municipal securities:
Non-taxable	38		—	—	—
Taxable	3,063		3	—	—
	$	14,744	58	—	—

Held-to-Maturity:
Municipal securities:
Non-taxable	$	1	—	—	—
Taxable	3,113		37	—	—
	$	3,114	37	—	—

2019
Available-for-Sale:

U.S. Agency notes	$	3,586	11	11,939	23
U.S. Agency mortgage-backed securities	10,555		10	19,233	233
Municipal securities:
Non-taxable	2,631		2	1,257	12
Taxable	5,067		35	450	—
	$	21,839	58	32,879	268

Held-to-Maturity:
Municipal securities:
Non-taxable	$	54	—	2,660	5
Taxable	—		—	—	—
	$	54	—	2,660	5

Management has determined that the unrealized losses at December 31, 2020 are primarily due to fluctuations in market interest rates and do not reflect credit quality deterioration of the securities. Because the Company does not have the intent to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost, the Company does not consider these investments to be other-than-temporarily impaired.

Contractual maturities of debt securities at December 31, 2020 were as follows (in thousands). Actual maturities may differ from contractual maturities when issuers have the right to call or prepay obligations.


	Available-for-Sale			Held-to-Maturity
	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Due within one year	$	3,795	3,846	2,135	2,144
Due from one to five years	47,699		48,838	5,676	5,758
Due from five to ten years	63,288		64,417	2,055	2,097
Due after ten years	729		736	14,944	14,961
	115,511		117,837	24,810	24,960
U.S. Agency mortgage-backed securities	88,455		91,634	—	—
	$	203,966	209,471	24,810	24,960

Debt securities with a market value of $118,599,000 and $123,009,000 at December 31, 2020 and 2019, respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

Certain information concerning the sale of debt securities available-for-sale for the years ended December 31 was as follows (in thousands):


	2020		2019	2018
Proceeds from sales	$	8,786	84,521	8,545
Gross realized gains	221		228	21
Gross realized losses	—		269	29

Equity securities with a readily determinable fair value are carried at fair value, with changes in fair value recognized in other operating income in the Consolidated Statements of Income. Equity securities without a readily determinable fair value are measured at cost minus impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions, as defined, for identical or similar investments of the same issuer. LCNB was not aware of any impairment or observable price change adjustments that needed to be made at December 31, 2020 on its investments in equity securities without a readily determinable fair value.

The amortized cost and estimated fair value of equity securities with a readily determinable fair value at December 31 are summarized as follows (in thousands):


	2020			2019
	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Mutual funds	$	1,395	1,402	1,371	1,345
Equity securities	778		987	741	967
Total equity securities with a readily determinable fair value	$	2,173	2,389	2,112	2,312

Certain information concerning changes in fair value of equity securities with a readily determinable fair value for the years ended December 31 was as follows (in thousands):


	2020		2019
Net gains recognized	$	675	264
Less net realized gains on equity securities sold	658		21
Unrealized gains recognized and still held at period end	$	17	243