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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
 12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
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 December 31 (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)
December 31, 2015
 
 
 
 
 
 
 
Recurring fair value measurements:
 
 
 
 
 
 
 
Investment securities available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury notes
$
72,846

 
72,846

 
—

 
—

U.S. Agency notes
139,889

 
—

 
139,889

 
—

U.S. Agency mortgage-backed securities
29,378

 
—

 
29,378

 
—

Certificates of deposit
249

 
—

 
249

 
—

Municipal securities:
 

 
 

 
 

 
 

Non-taxable
105,479

 
—

 
105,479

 
—

Taxable
26,941

 
—

 
26,941

 
—

Mutual funds
2,466

 
1,466

 
1,000

 
—

Trust preferred securities
50

 
50

 
—

 
—

Equity securities
680

 
680

 
—

 
—

Total recurring fair value measurements
$
377,978

 
75,042

 
302,936

 
—

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements:
 

 
 

 
 

 
 

Impaired loans
$
4,722

 
—

 
—

 
4,722

Other real estate owned and repossessed assets
846

 
—

 
—

 
846

Total nonrecurring fair value measurements
$
5,568

 
—

 
—

 
5,568

 
 
 
 
 
 
 
 
December 31, 2014
 

 
 

 
 

 
 

Recurring fair value measurement:
 

 
 

 
 

 
 

Investment securities available-for-sale:
 

 
 

 
 

 
 

U.S. Treasury notes
$
62,560

 
62,560

 
—

 
—

U.S. Agency notes
83,637

 
—

 
83,637

 
—

U.S. Agency mortgage-backed securities
38,032

 
—

 
38,032

 
—

Certificates of deposit with other banks
3,086

 
—

 
3,086

 
—

Municipal securities:
 

 
 

 
 

 
 

Non-taxable
77,395

 
—

 
77,395

 
—

Taxable
16,395

 
—

 
16,395

 
—

Mutual funds
2,461

 
1,461

 
1,000

 
—

Trust preferred securities
50

 
50

 
—

 
—

Equity securities
1,749

 
1,749

 
—

 
—

Total recurring fair value measurements
$
285,365

 
65,820

 
219,545

 
—

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements:
 

 
 

 
 

 
 

Impaired loans
$
4,872

 
—

 
—

 
4,872

Other real estate owned and repossessed assets
1,370

 
—

 
—

 
1,370

Total nonrecurring fair value measurements
$
6,242

 
—

 
—

 
6,242
Fair Value, 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 December 31, 2015 and 2014 (dollars in thousands):
 
 
 
 
 
 
 
 
Range
 
 
Fair Value
 
Valuation Technique
 
Unobservable Inputs
 
High
 
Low
 
Weighted Average
2015
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans
 
$
4,722

 
Estimated sales price
 
Adjustments for comparable properties, discounts to reflect current market conditions
 
Not applicable
 
 
 
 
Discounted cash flows
 
Discount rate
 
11.00
%
 
4.00
%
 
5.27
%
Other real estate owned
 
846

 
Estimated sales price
 
Adjustments for comparable properties, discounts to reflect current market conditions
 
Not applicable
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans
 
$
4,872

 
Estimated sales price
 
Adjustments for comparable properties, discounts to reflect current market conditions
 
Not applicable
 
 
 
 
Discounted cash flows
 
Discount rate
 
10.50%
 
4.00%
 
5.36%
Other real estate owned
 
1,370

 
Estimated sales price
 
Adjustments for comparable properties, discounts to reflect current market conditions
 
 
 
 
 
 
Carrying Amounts and Estimated Fair Values of Financial Instruments
Carrying amounts and estimated fair values of financial instruments as of December 31 were 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)
2015
 
 
 
 
 
 
 
 
 
FINANCIAL ASSETS:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
14,987

 
14,987

 
14,987

 
—

 
—

Investment securities, held-to-maturity
22,633

 
22,630

 
—

 
—

 
22,630

Federal Reserve Bank stock
2,732

 
2,732

 
2,732

 
—

 
—

Federal Home Loan Bank stock
3,638

 
3,638

 
3,638

 
—

 
—

Loans, net
767,809

 
761,388

 
—

 
—

 
761,388

Accrued interest receivable
3,380

 
3,380

 
208

 
1,280

 
1,892

 
 
 
 
 
 
 
 
 
 
FINANCIAL LIABILITIES:
 

 
 

 
 
 
 
 
 
Deposits
1,087,160

 
1,087,914

 
869,940

 
217,974

 
—

Short-term borrowings
37,387

 
37,387

 
37,387

 
—

 
—

Long-term debt
5,947

 
6,290

 
—

 
6,290

 
—

Accrued interest payable
345

 
345

 
16

 
329

 
—

 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
FINANCIAL ASSETS:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
15,845

 
15,845

 
15,845

 
—

 
—

Investment securities, held-to-maturity
22,725

 
22,138

 
—

 
—

 
22,138

Federal Reserve Bank stock
2,346

 
2,346

 
2,346

 
—

 
—

Federal Home Loan Bank stock
3,638

 
3,638

 
3,638

 
—

 
—

Loans, net
695,835

 
699,715

 
—

 
—

 
699,715

Accrued interest receivable
2,849

 
2,849

 
178

 
885

 
1,786

 
 
 
 
 
 
 
 
 
 
FINANCIAL LIABILITIES:
 

 
 

 
 
 
 
 
 
Deposits
946,205

 
947,541

 
731,766

 
215,775

 
—

Short-term borrowings
16,645

 
16,645

 
16,645

 
—

 
—

Long-term debt
11,357

 
11,944

 
—

 
11,944

 
—

Accrued interest payable
413

 
413

 
13

 
400

 
—