Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (in thousands):



				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)
March 31, 2017
Recurring fair value measurements:
	Investment securities available-for-sale:
	U.S. Treasury notes	$	33,305	$	33,305	$	—	$	—
	U.S. Agency notes	90,325		—		90,325		—
	U.S. Agency mortgage-backed securities	67,968		—		67,968		—
	Municipal securities:
	Non-taxable	112,486		—		112,486		—
	Taxable	19,351		—		19,351		—
	Mutual funds	1,000		—		1,000		—
	Mutual funds measured at net asset value (a)	1,491
	Trust preferred securities	49		49		—		—
	Equity securities	701		701		—		—
	Total recurring fair value measurements	$	326,676	$	34,055	$	291,130	$	—

Nonrecurring fair value measurements:
	Impaired loans	$	2,857	$	—	$	—	$	2,857

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 funds	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 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.

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 March 31, 2017 and December 31, 2016 (dollars in thousands):



					Range
	Fair Value		Valuation Technique	Unobservable Inputs	High		Low		Weighted Average
March 31, 2017
Impaired loans	$	2,857	Estimated sales price	Adjustments for comparable properties, discounts to reflect current market conditions	Not applicable
			Discounted cash flows	Discount rate	8.25	%	3.25	%	5.62	%

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	%

Carrying Amounts and Estimated Fair Values of Financial Instruments

Carrying amounts and estimated fair values of financial instruments as of March 31, 2017 and December 31, 2016 are as follows (in thousands):



					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)
March 31, 2017
FINANCIAL ASSETS:
Cash and cash equivalents	$	33,274	$	33,274	$	33,274	$	—	$	—
Investment securities, held-to-maturity	38,455		38,012		—		—		38,012
Federal Reserve Bank stock	2,732		2,732		2,732		—		—
Federal Home Loan Bank stock	3,638		3,638		3,638		—		—
Loans, net	807,153		790,919		—		—		790,919
Accrued interest receivable	4,176		4,176		—		4,176		—

FINANCIAL LIABILITIES:
Deposits	1,148,198		1,150,366		934,924		215,442		—
Short-term borrowings	15,957		15,957		15,957		—		—
Long-term debt	480		491		—		491		—
Accrued interest payable	280		280		—		280		—

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		—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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