Investment Securities

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The amortized cost and estimated fair value of investment securities at June 30, 2016 and December 31, 2015 are summarized as follows (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses	Fair Value
June 30, 2016
Available-for-Sale:
U.S. Treasury notes	$	52,567	1,414		—	53,981
U.S. Agency notes	113,554		1,784		—	115,338
U.S. Agency mortgage-backed securities	47,701		592		17	48,276
Certificates of deposit	248		—		—	248
Municipal securities:
Non-taxable	108,842		2,397		6	111,233
Taxable	20,507		721		2	21,226
Mutual funds	2,508		8		17	2,499
Trust preferred securities	49		—		—	49
Equity securities	633		48		3	678
	$	346,609	$	6,964	45	353,528
Held-to-Maturity:
Municipal securities:
Non-taxable	30,084		796		29	30,851
Taxable	9,363		68		—	9,431
	$	39,447	864		29	40,282
December 31, 2015
Available-for-Sale:
U.S. Treasury notes	$	72,672	309		135	72,846
U.S. Agency notes	140,876		164		1,151	139,889
U.S. Agency mortgage-backed securities	29,608		174		404	29,378
Certificates of deposit	248		1		—	249
Municipal securities:
Non-taxable	103,900		1,713		134	105,479
Taxable	26,738		337		134	26,941
Mutual funds	2,517		—		51	2,466
Trust preferred securities	49		1		—	50
Equity securities	659		40		19	680
	$	377,267	2,739		2,028	377,978
Held-to-Maturity:
Municipal securities:
Non-taxable	22,233		95		97	22,231
Taxable	400		—		1	399
	$	22,633	95		98	22,630

Information concerning investment securities with gross unrealized losses at June 30, 2016 and December 31, 2015, 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, 2016
Available-for-Sale:
U.S. Treasury notes	$	—	—	$	—	—
U.S. Agency notes	—		—	—		—
U.S. Agency mortgage-backed securities	—		—	3,909		17
Municipal securities:
Non-taxable	—		—	2,770		6
Taxable	1,005		—	451		2
Mutual funds	—		—	263		17
Trust preferred securities	49		—	—		—
Equity securities	68		3	—		—
	$	1,122	3	$	7,393	42
Held-to-Maturity:
Municipal securities:
Non-taxable	$	—	—	2,636		29
Taxable	—		—	—		—
	$	—	—	$	2,636	29
December 31, 2015
Available-for-Sale:
U.S. Treasury notes	$	32,854	75	$	4,846	60
U.S. Agency notes	104,053		1,000	9,869		151
U.S. Agency mortgage-backed securities	19,190		256	4,068		148
Municipal securities:
Non-taxable	13,124		74	7,037		60
Taxable	15,601		114	880		20
Mutual funds	1,215		17	268		34
Trust preferred securities	—		—	—		—
Equity securities	248		12	73		7
	$	186,285	1,548	$	27,041	480
Held-to-Maturity:
Municipal securities:
Non-taxable	$	832	3	$	3,426	94
Taxable	399		1	—		—
	$	1,231	4	$	3,426	94

Management has determined that the unrealized losses at June 30, 2016 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 investment securities at June 30, 2016 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	$	23,089	23,181	3,620	3,626
Due from one to five years	150,743		153,748	4,211	4,222
Due from five to ten years	121,380		124,583	11,073	11,239
Due after ten years	506		514	20,543	21,195
	295,718		302,026	39,447	40,282
U.S. Agency mortgage-backed securities	47,701		48,276	—	—
Mutual funds	2,508		2,499	—	—
Trust preferred securities	49		49	—	—
Equity securities	633		678	—	—
	$	346,609	353,528	39,447	40,282

Investment securities with a market value of $228,901,000 and $215,952,000 at June 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and for other purposes required as permitted by law.

Certain information concerning the sale of investment securities available-for-sale for the three and six months ended June 30, 2016 and 2015 was as follows (in thousands):

	Three Months Ended   June 30,			Six Months Ended   June 30,
	2016		2015	2016		2015
Proceeds from sales	$	16,100	48,953	$	36,529	54,955
Gross realized gains	300		234	671		345
Gross realized losses	21		13	21		13