Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

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 September 30, 2020 and December 31, 2019 (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)
September 30, 2020
Recurring fair value measurements:
	Equity securities with a readily determinable fair value:

	Equity securities	$	820	820	—	—
	Mutual funds	42		42	—	—
	Mutual funds measured at net asset value	1,351		1,351	—	—

	Debt securities, available-for-sale:
	U.S. Treasury notes	2,399		2,399	—	—
	U.S. Agency notes	29,268		—	29,268	—
	Corporate bonds	685		—	685	—
	U.S. Agency mortgage-backed securities	89,660		—	89,660	—

	Municipal securities:
	Non-taxable	13,083		—	13,083	—
	Taxable	22,841		—	22,841	—
	Total recurring fair value measurements	$	160,149	4,612	155,537	—

Nonrecurring fair value measurements:
	Impaired loans	$	2,186	—	—	2,186

	Total nonrecurring fair value measurements	$	2,186	—	—	2,186

December 31, 2019
Recurring fair value measurements:
	Equity securities with a readily determinable fair value:

	Equity securities	$	967	967	—	—
	Mutual funds	45		45	—	—
	Mutual funds measured at net asset value	1,300		1,300	—	—

	Debt securities, available-for-sale:
	U.S. Treasury notes	2,309		2,309	—	—
	U.S. Agency notes	48,984		—	48,984	—
	U.S. Agency mortgage-backed securities	84,406		—	84,406	—

	Municipal securities:
	Non-taxable	22,321		—	22,321	—
	Taxable	19,980		—	19,980	—
	Total recurring fair value measurements	$	180,312	4,621	175,691	—

Nonrecurring fair value measurements:
	Impaired loans	$	2,840	—	—	2,840
	Other real estate owned and repossessed assets	197		—	—	197
	Total nonrecurring fair value measurements	$	3,037	—	—	3,037

Fair Value Measurements 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 September 30, 2020 and December 31, 2019 (dollars in thousands):


					Range
	Fair Value		Valuation Technique	Unobservable Inputs	High		Low		Weighted Average
September 30, 2020
Impaired loans	$	1,591	Estimated sales price	Adjustments for comparable properties, discounts to reflect current market conditions	Not applicable
	595		Discounted cash flows	Discount rate	8.25	%	4.50	%	6.61	%


December 31, 2019
Impaired loans	$	1,931	Estimated sales price	Adjustments for comparable properties, discounts to reflect current market conditions	Not applicable
	909		Discounted cash flows	Discount rate	8.25	%	4.50	%	6.83	%
Other real estate owned	197		Estimated sales price	Adjustments for comparable properties, discounts to reflect current market conditions	Not applicable

Carrying Amounts and Estimated Fair Values of Financial Instruments

Carrying amounts and estimated fair values of financial instruments as of September 30, 2020 and December 31, 2019 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)
September 30, 2020
FINANCIAL ASSETS:
Cash and cash equivalents	$	24,485	24,485	24,485	—	—

Debt securities, held-to-maturity	26,941		27,277	—	—	27,277
Federal Reserve Bank stock	4,652		4,652	4,652	—	—
Federal Home Loan Bank stock	5,203		5,203	5,203	—	—
Loans, net	1,334,186		1,286,554	—	—	1,286,554
Accrued interest receivable	9,559		9,559	—	9,559	—

FINANCIAL LIABILITIES:
Deposits	1,430,394		1,433,857	1,162,096	271,761	—

Long-term debt	31,999		32,727	—	32,727	—
Accrued interest payable	514		514	—	514	—

December 31, 2019
FINANCIAL ASSETS:
Cash and cash equivalents	$	20,765	20,765	20,765	—	—

Debt securities, held-to-maturity	27,525		27,888	—	—	27,888
Federal Reserve Bank stock	4,652		4,652	4,652	—	—
Federal Home Loan Bank stock	5,203		5,203	5,203	—	—
Loans, net	1,239,406		1,252,156	—	—	1,252,156
Accrued interest receivable	3,911		3,911	—	3,911	—

FINANCIAL LIABILITIES:
Deposits	1,348,280		1,352,061	1,004,057	348,004	—

Long-term debt	40,994		41,487	—	41,487	—
Accrued interest payable	705		705	—	705	—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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