Investment Securities

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

The amortized cost and estimated fair value of equity and debt securities at March 31, 2022 and December 31, 2021 are summarized as follows (in thousands):


	Amortized Cost		Unrealized Gains	Unrealized Losses	Fair Value
March 31, 2022
Debt Securities, Available-for-Sale:
U.S. Treasury notes	$	79,477	2	4,746	74,733
U.S. Agency notes	89,282		—	6,536	82,746
Corporate bonds	6,200		44	317	5,927
U.S. Agency mortgage-backed securities	91,497		110	4,807	86,800
Municipal securities:
Non-taxable	8,496		5	228	8,273
Taxable	37,151		88	2,254	34,985
	$	312,103	249	18,888	293,464

Debt Securities, Held-to-Maturity:
Municipal securities:
Non-taxable	$	19,304	43	309	19,038
Taxable	3,569		—	198	3,371
	$	22,873	43	507	22,409

December 31, 2021
Debt Securities, Available-for-Sale:
U.S. Treasury notes	$	75,443	57	756	74,744
U.S. Agency notes	89,293		45	2,092	87,246
Corporate Bonds	5,200		70	118	5,152
U.S. Agency mortgage-backed securities	96,018		1,350	692	96,676
Municipal securities:
Non-taxable	8,959		125	18	9,066
Taxable	35,208		531	446	35,293
	$	310,121	2,178	4,122	308,177

Debt Securities, Held-to-Maturity:
Municipal securities:
Non-taxable	$	19,403	98	—	19,501
Taxable	3,569		21	4	3,586
	$	22,972	119	4	23,087

Information concerning debt securities with gross unrealized losses at March 31, 2022 and December 31, 2021, aggregated by length of time that individual securities have been in a continuous loss position, is as follows (dollars in thousands):


	Less than Twelve Months			Twelve Months or Greater
	Fair Value		Unrealized Losses	Fair Value	Unrealized Losses
March 31, 2022
Available-for-Sale:
U.S. Treasury notes	$	73,736	4,746	—	—
U.S. Agency notes	35,960		2,316	46,786	4,220
Corporate bonds	4,536		264	647	53
U.S. Agency mortgage-backed securities	58,478		2,739	20,942	2,068
Municipal securities:
Non-taxable	6,088		228	—	—
Taxable	21,200		1,387	7,667	867
	$	199,998	11,680	76,042	7,208

Held-to-Maturity:
Municipal securities:
Non-taxable	$	7,434	309	—	—
Taxable	3,371		198	—	—
	$	10,805	507	—	—

December 31, 2021
Available-for-Sale:
U.S. Treasury notes	$	66,891	756	—	—
U.S. Agency notes	58,648		1,257	20,289	835
Corporate Bonds	3,898		102	484	16
U.S. Agency mortgage-backed securities	49,813		692	—	—
Municipal securities:
Non-taxable	1,020		18	—	—
Taxable	18,434		322	3,535	124
	$	198,704	3,147	24,308	975

Held-to-Maturity:
Municipal securities:
Non-taxable	$	46	—	—	—
Taxable	271		4	—	—
	$	317	4	—	—

Management has determined that the unrealized losses at March 31, 2022 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 debt securities at March 31, 2022 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	$	522	524	1,867	1,867
Due from one to five years	90,192		85,832	4,960	4,818
Due from five to ten years	129,163		119,631	2,894	2,785
Due after ten years	729		677	13,152	12,939
	220,606		206,664	22,873	22,409
U.S. Agency mortgage-backed securities	91,497		86,800	—	—
	$	312,103	293,464	22,873	22,409

Debt securities with a market value of $140,418,000 and $128,426,000 at March 31, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and for other purposes required or as permitted by law.

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 condensed 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 March 31, 2022 on its investments in equity securities without a readily determinable fair value.

The cost and estimated fair value of equity securities with a readily determinable fair value at March 31, 2022 and December 31, 2021 are summarized as follows (in thousands):


	March 31, 2022			December 31, 2021
	Cost		Fair Value	Cost	Fair Value
Mutual funds	$	1,414	1,317	1,410	1,379
Equity securities	778		1,107	778	1,167
Total equity securities with a readily determinable fair value	$	2,192	2,424	2,188	2,546

Changes in the fair value of equity securities with a readily determinable fair value for the three months ended March 31, 2022 and 2021 were due solely to changes in unrealized gains and losses.