Investment Securities

9 Months Ended

Sep. 30, 2011

Investment Securities [Abstract]

Investment Securities

Note 2 - Investment Securities

The amortized cost and estimated fair value of available-for-sale investment securities at September 30, 2011 and December 31, 2010 are summarized as follows (in thousands):

	September 30, 2011
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury notes	$	17,437		115		33		17,519
U.S. Agency notes		102,302		1,807		9		104,100
U.S. Agency mortgage-backed securities		46,139		1,615		82		47,672
Corporate securities		6,361		23		25		6,359
Municipal securities:
Non-taxable		63,305		4,005		11		67,299
Taxable		21,581		851		32		22,400
Mutual funds		1,588		28		-		1,616
Trust preferred securities		549		45		19		575
Equity securities		476		17		16		477
	$	259,738		8,506		227		268,017

	December 31, 2010
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury notes	$	19,724		16		155		19,585
U.S. Agency notes		83,600		107		845		82,862
U.S. Agency mortgage-backed securities		31,786		1,364		56		33,094
Corporate securities		2,012		13		-		2,025
Municipal securities:
Non-taxable		71,902		2,642		116		74,428
Taxable		22,049		302		383		21,968
Mutual fund		1,063		-		10		1,053
Trust preferred securities		549		57		2		604
Equity securities		249		18		4		263
	$	232,934		4,519		1,571		235,882

The fair value of held-to-maturity investment securities, consisting of taxable and non-taxable municipal securities, approximates amortized cost at September 30, 2011 and December 31, 2010.

Substantially all securities in unrealized loss positions at September 30, 2011 have been in a loss position less than twelve months.  Management has determined that the unrealized losses at September 30, 2011 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.