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Investment Securities | 6 Months Ended
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Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT SECURITIES The amortized cost and estimated fair value of debt securities and the allowance for credit losses of securities held-to-maturity at June 30, 2023 and December 31, 2022 are summarized as follows (in thousands):
| Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
June 30, 2023 |  |  |  |  |  |  |
Debt Securities, Available-for-Sale: |  |  |  |  |  |  |
U.S. Treasury notes | $ | 79,006 |  |  | — |  |  | 8,043 |  |  | 70,963 |
U.S. Agency notes | 89,057 |  |  | — |  |  | 10,337 |  |  | 78,720 |
Corporate bonds | 7,450 |  |  | 6 |  |  | 953 |  |  | 6,503 |
U.S. Agency mortgage-backed securities | 85,906 |  |  | — |  |  | 10,584 |  |  | 75,322 |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | 8,829 |  |  | — |  |  | 327 |  |  | 8,502 |
Taxable | 46,026 |  |  | — |  |  | 4,880 |  |  | 41,146 |
| $ | 316,274 |  |  | 6 |  |  | 35,124 |  |  | 281,156 |
Debt Securities, Held-to-Maturity: |  |  |  |  |  |  |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | $ | 15,692 |  |  | 6 |  |  | 1,162 |  |  | 14,536 |
Taxable | 3,431 |  |  | — |  |  | 377 |  |  | 3,054 |
| $ | 19,123 |  |  | 6 |  |  | 1,539 |  |  | 17,590 |
December 31, 2022 |  |  |  |  |  |  |
Debt Securities, Available-for-Sale: |  |  |  |  |  |  |
U.S. Treasury notes | $ | 84,927 |  |  | — |  |  | 8,480 |  |  | 76,447 |
U.S. Agency notes | 89,160 |  |  | — |  |  | 11,184 |  |  | 77,976 |
Corporate Bonds | 7,450 |  |  | 13 |  |  | 778 |  |  | 6,685 |
U.S. Agency mortgage-backed securities | 90,746 |  |  | 5 |  |  | 11,311 |  |  | 79,440 |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | 8,892 |  |  | — |  |  | 368 |  |  | 8,524 |
Taxable | 46,556 |  |  | 1 |  |  | 5,779 |  |  | 40,778 |
| $ | 327,731 |  |  | $ | 19 |  |  | 37,900 |  |  | 289,850 |
Debt Securities, Held-to-Maturity: |  |  |  |  |  |  |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | $ | 16,447 |  |  | 10 |  |  | 594 |  |  | 15,863 |
Taxable | 3,431 |  |  | — |  |  | 409 |  |  | 3,022 |
| $ | 19,878 |  |  | 10 |  |  | 1,003 |  |  | 18,885 |
The Company estimated the expected credit losses at June 30, 2023 to be immaterial based on the composition of the securities portfolio. Information concerning debt securities with gross unrealized losses at June 30, 2023 and December 31, 2022, 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
June 30, 2023 |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |
U.S. Treasury notes | $ | 198 |  |  | 1 |  |  | 70,765 |  |  | 8,042 |
U.S. Agency notes | — |  |  | — |  |  | 78,720 |  |  | 10,337 |
Corporate bonds | — |  |  | — |  |  | 5,746 |  |  | 953 |
U.S. Agency mortgage-backed securities | 4,058 |  |  | 110 |  |  | 71,192 |  |  | 10,474 |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | 2,124 |  |  | 21 |  |  | 5,913 |  |  | 306 |
Taxable | 2,030 |  |  | 51 |  |  | 39,116 |  |  | 4,829 |
| $ | 8,410 |  |  | 183 |  |  | 271,452 |  |  | 34,941 |
Held-to-Maturity: |  |  |  |  |  |  |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | $ | 6,953 |  |  | 618 |  |  | 6,845 |  |  | 544 |
Taxable | — |  |  | — |  |  | 3,054 |  |  | 377 |
| $ | 6,953 |  |  | 618 |  |  | 9,899 |  |  | 921 |
December 31, 2022 |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |
U.S. Treasury notes | $ | 16,521 |  |  | 931 |  |  | 59,927 |  |  | 7,549 |
U.S. Agency notes | 7,729 |  |  | 543 |  |  | 70,247 |  |  | 10,641 |
Corporate Bonds | 2,667 |  |  | 283 |  |  | 3,255 |  |  | 495 |
U.S. Agency mortgage-backed securities | 41,543 |  |  | 3,597 |  |  | 37,282 |  |  | 7,714 |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | 6,831 |  |  | 248 |  |  | 893 |  |  | 120 |
Taxable | 22,162 |  |  | 1,951 |  |  | 18,435 |  |  | 3,828 |
| $ | 97,453 |  |  | 7,553 |  |  | 190,039 |  |  | 30,347 |
Held-to-Maturity: |  |  |  |  |  |  |
Municipal securities: |  |  |  |  |  |  |
Non-taxable | $ | 9,567 |  |  | 593 |  |  | 31 |  |  | 1 |
Taxable | 2,811 |  |  | 370 |  |  | 212 |  |  | 39 |
| $ | 12,378 |  |  | 963 |  |  | 243 |  |  | 40 |
LCNB has not specifically identified available-for-sale securities in a loss position that it intends to sell in the near term and does not believe that it will be required to sell any such securities. Securities are reviewed on a quarterly basis to assess declines in fair value for credit losses. Consideration is given to such factors as the credit rating of the borrower, market conditions such as current interest rates, any adverse conditions specific to the security, and delinquency status on contractual payments. For the three and six months ended June 30, 2023 and 2022, management concluded that, in all instances, fair values were less than carrying values due to market and other factors and that no credit loss provisions were required. Debt securities with a market value of $123.1 million and $166.4 million at June 30, 2023 and December 31, 2022, respectively, were pledged to secure public deposits and for other purposes required or as permitted by law. Excluding holdings in U.S. Treasury securities and U.S. Government Agencies, there were no investments in securities of any issuer that exceeded 10% of LCNB's consolidated shareholders' equity at June 30, 2023. Contractual maturities of debt securities at June 30, 2023 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 | $ | 8,913 |  |  | 8,805 |  |  | 280 |  |  | 283 |
Due from one to five years | 152,490 |  |  | 137,092 |  |  | 3,585 |  |  | 3,445 |
Due from five to ten years | 68,234 |  |  | 59,281 |  |  | 2,440 |  |  | 2,252 |
Due after ten years | 731 |  |  | 656 |  |  | 12,818 |  |  | 11,610 |
| 230,368 |  |  | 205,834 |  |  | 19,123 |  |  | 17,590 |
U.S. Agency mortgage-backed securities | 85,906 |  |  | 75,322 |  |  | — |  |  | — |
| $ | 316,274 |  |  | 281,156 |  |  | 19,123 |  |  | 17,590 |
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 June 30, 2023 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 June 30, 2023 and December 31, 2022 are summarized as follows (in thousands):
| June 30, 2023 |  | December 31, 2022
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Mutual funds | $ | 1,399 |  |  | 1,207 |  |  | 1,429 |  |  | 1,234 |
Equity securities | 10 |  |  | 72 |  |  | 778 |  |  | 1,039 |
Total equity securities with a readily determinable fair value | $ | 1,409 |  |  | 1,279 |  |  | 2,207 |  |  | 2,273 |
Changes in the fair value of equity securities with a readily determinable fair value for the three and six months ended June 30, 2023 and 2022 were as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net losses recognized during the period | $ | (14) |  |  | (178) |  |  | (45) |  |  | (304) |
Less net gains recognized during the period 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 | $ | (14) |  |  | (178) |  |  | 16 |  |  | (304) |

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