| 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, 2017 | | | | | | | | Recurring fair value measurements: | | | | | | | | Investment securities available-for-sale: | | | | | | | | U.S. Treasury notes | $ | 2,259 |
| | 2,259 |
| | — |
| | — |
| U.S. Agency notes | 83,261 |
| | — |
| | 83,261 |
| | — |
| U.S. Agency mortgage-backed securities | 67,153 |
| | — |
| | 67,153 |
| | — |
| Municipal securities: | |
| | |
| | |
| | |
| Non-taxable | 102,174 |
| | — |
| | 102,174 |
| | — |
| Taxable | 20,366 |
| | — |
| | 20,366 |
| | — |
| Mutual funds | 1,023 |
| | 23 |
| | 1,000 |
| | — |
| Mutual funds measured at net asset value (a) | 1,519 |
| | | | | | | Trust preferred securities | 50 |
| | 50 |
| | — |
| | — |
| Equity securities | 667 |
| | 667 |
| | — |
| | — |
| Total recurring fair value measurements | $ | 278,472 |
| | 2,999 |
| | 273,954 |
| | — |
| | | | | | | | | | Nonrecurring fair value measurements: | |
| | |
| | |
| | |
| Impaired loans | $ | 3,359 |
| | — |
| | — |
| | 3,359 |
| | | | | | | | | | December 31, 2016 | |
| | |
| | |
| | |
| Recurring fair value measurement: | |
| | |
| | |
| | |
| 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 Balance Sheets. |
|
| 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, 2017 and 2016 (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | Range | | | Fair Value | | Valuation Technique | | Unobservable Inputs | | High | | Low | | Weighted Average | 2017 | | | | | | | | | | | | | Impaired loans | | $ | 3,359 |
| | Estimated sales price | | Adjustments for comparable properties, discounts to reflect current market conditions | | Not applicable | | | | | Discounted cash flows | | Discount rate | | 8.25 | % | | 3.25 | % | | 6.27 | % | | | | | | | | | | | | | | 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 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) | 2017 | | | | | | | | | | FINANCIAL ASSETS: | | | | | | | | | | Cash and cash equivalents | $ | 25,386 |
| | 25,386 |
| | 25,386 |
| | — |
| | — |
| Investment securities, held-to-maturity | 32,571 |
| | 32,350 |
| | — |
| | — |
| | 32,350 |
| Federal Reserve Bank stock | 2,732 |
| | 2,732 |
| | 2,732 |
| | — |
| | — |
| Federal Home Loan Bank stock | 3,638 |
| | 3,638 |
| | 3,638 |
| | — |
| | — |
| Loans, net | 845,657 |
| | 813,368 |
| | — |
| | — |
| | 813,368 |
| Accrued interest receivable | 3,511 |
| | 3,511 |
| | — |
| | 3,511 |
| | — |
| | | | | | | | | | | FINANCIAL LIABILITIES: | |
| | |
| | | | | | | Deposits | 1,085,821 |
| | 1,087,086 |
| | 894,046 |
| | 193,040 |
| | — |
| Short-term borrowings | 47,000 |
| | 47,000 |
| | 47,000 |
| | — |
| | — |
| Long-term debt | 303 |
| | 307 |
| | — |
| | 307 |
| | — |
| Accrued interest payable | 329 |
| | 329 |
| | — |
| | 329 |
| | — |
| | | | | | | | | | | 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 |
| | — |
|
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