Note 3 - Investment Securities

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 3 - INVESTMENT SECURITIES

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

	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
2024
Debt Securities Available-for-Sale:
U.S. Treasury notes	$	70,934		—		4,754		66,180
U.S. Agency notes		83,770		—		6,253		77,517
Corporate Bonds		8,200		5		449		7,756
U.S. Agency mortgage-backed securities		78,869		3		9,326		69,546
Municipal securities:
Non-taxable		4,248		—		266		3,982
Taxable		36,599		—		3,253		33,346
	$	282,620		8		24,301		258,327
Debt Securities Held-to-Maturity:
Municipal securities:
Non-taxable	$	13,200		—		922		12,278
Taxable		3,129		—		474		2,655
	$	16,329		—		1,396		14,933
2023
Debt Securities Available-for-Sale:
U.S. Treasury notes	$	74,404		—		6,202		68,202
U.S. Agency notes		88,978		—		8,077		80,901
Corporate Bonds		7,450		—		916		6,534
U.S. Agency mortgage-backed securities		81,634		2		8,846		72,790
Municipal securities:
Non-taxable		7,416		—		245		7,171
Taxable		44,923		1		3,921		41,003
	$	304,805		3		28,207		276,601
Debt Securities Held-to-Maturity:
Municipal securities:
Non-taxable	$	13,580		4		872		12,712
Taxable		3,283		—		316		2,967
	$	16,863		4		1,188		15,679

The Company estimated the expected credit losses at  December 31, 2024 and  December 31, 2023 to be immaterial based on the composition of the securities portfolio.

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		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses
2024
Available-for-Sale:
U.S. Treasury notes	$	3,232		—		62,948		4,754
U.S. Agency notes		3,991		137		73,526		6,116
Corporate Bonds		743		7		6,258		442
U.S. Agency mortgage-backed securities		5,806		180		63,539		9,146
Municipal securities:
Non-taxable		—		—		3,982		266
Taxable		—		—		33,286		3,253
	$	13,772		324		243,539		23,977
Held-to-Maturity:
Municipal securities:
Non-taxable	$	2,283		17		9,578		905
Taxable		—		—		2,655		474
	$	2,283		17		12,233		1,379
2023
Available-for-Sale:
U.S. Treasury notes	$	—		—		68,202		6,202
U.S. Agency notes		—		—		80,901		8,077
Corporate Bonds		734		16		5,800		900
U.S. Agency mortgage-backed securities		—		—		72,287		8,846
Municipal securities:
Non-taxable		1,540		10		5,631		235
Taxable		—		—		40,392		3,921
	$	2,274		26		273,213		28,181
Held-to-Maturity:
Municipal securities:
Non-taxable	$	6,012		476		5,975		396
Taxable		—		—		2,966		316
	$	6,012		476		8,941		712

At December 31, 2024, LCNB’s securities portfolio consisted of 161 securities, 157 of which were in an unrealized loss position. At December 31, 2023, LCNB's securities portfolio consisted of 207 securities, 176 of which were in an unrealized loss position. After considering the issuers of the securities, LCNB management determined that that the unrealized losses were due to changing interest rate environments. At December 31, 2024, as LCNB had no intent to sell its debt securities before recovery of their cost basis and as it was more likely than not that it will not be required to sell its debt securities before recovery of the cost basis, no unrealized losses were deemed to represent credit losses.

Contractual maturities of debt securities at December 31, 2024 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		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due within one year	$	29,992		29,317		64		63
Due from one to five years		143,031		131,434		991		961
Due from five to ten years		30,728		28,030		9,638		9,007
Due after ten years		—		—		5,636		4,902
		203,751		188,781		16,329		14,933
U.S. Agency mortgage-backed securities		78,869		69,546		—		—
	$	282,620		258,327		16,329		14,933

Debt securities with a market value of $116,186,000 and $124,367,000 at December 31, 2024 and 2023, 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):

	2024		2023		2022
Proceeds from sales	$	9,615		5,210		—
Gross realized gains		—		—		—
Gross realized losses		214		—		—

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, 2024 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):

	2024				2023
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Mutual funds	$	1,451		1,265		1,415		1,240
Equity securities		10		98		10		96
Total equity securities with a readily determinable fair value	$	1,461		1,363		1,425		1,336

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):

	2024			2023			2022
Net losses recognized during the period on equity securities	$	(9	)		(5	)		(292	)
Less net losses recognized on equity securities sold during the period		—			(61	)		—
Net unrealized gains (losses) recognized during the reporting period on equity securities still held at period end	$	(9	)		56			(292	)