Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2021

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 June 30, 2021 and December 31, 2020 (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)
June 30, 2021
Recurring fair value measurements:
	Equity securities with a readily determinable fair value:
	Equity securities	$	1,094	1,094	—	—
	Mutual funds	54		54	—	—
	Mutual funds measured at net asset value	1,340		1,340	—	—

	Debt securities, available-for-sale:
	U.S. Treasury notes	64,494		64,494	—	—
	U.S. Agency notes	95,489		—	95,489	—
	Corporate bonds	1,893		—	1,893	—
	U.S. Agency mortgage-backed securities	100,093		—	100,093	—
	Municipal securities:
	Non-taxable	11,899		—	11,899	—
	Taxable	36,647		—	36,647	—
	Total recurring fair value measurements	$	313,003	66,982	246,021	—

Nonrecurring fair value measurements:
	Impaired loans	$	1,065	—	—	1,065

	Total nonrecurring fair value measurements	$	1,065	—	—	1,065

December 31, 2020
Recurring fair value measurements:
	Equity securities with a readily determinable fair value:
	Equity securities	$	987	987	—	—
	Mutual funds	50		50	—	—
	Mutual funds measured at net asset value	1,352		1,352	—	—

	Debt securities, available-for-sale:
	U.S. Treasury notes	2,388		2,388	—	—
	U.S. Agency notes	67,900		—	67,900	—
	Corporate bonds	1,179		—	1,179	—
	U.S. Agency mortgage-backed securities	91,634		—	91,634	—
	Municipal securities:
	Non-taxable	12,933		—	12,933	—
	Taxable	33,437		—	33,437	—
	Total recurring fair value measurements	$	211,860	4,777	207,083	—

Nonrecurring fair value measurements:
	Impaired loans	$	3,439	—	—	3,439

	Total nonrecurring fair value measurements	$	3,439	—	—	3,439

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 June 30, 2021 and December 31, 2020 (dollars in thousands):


					Range
	Fair Value		Valuation Technique	Unobservable Inputs	High		Low		Weighted Average
June 30, 2021

Impaired loans	1,065		Discounted cash flows	Discount rate	8.25	%	4.00	%	6.12	%


December 31, 2020
Impaired loans	$	1,352	Estimated sales price	Adjustments for comparable properties, discounts to reflect current market conditions	Not applicable
	2,087		Discounted cash flows	Discount rate	8.25	%	4.00	%	4.74	%

Carrying Amounts and Estimated Fair Values of Financial Instruments

Carrying amounts and estimated fair values of financial instruments as of June 30, 2021 and December 31, 2020 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)
June 30, 2021
FINANCIAL ASSETS:
Cash and cash equivalents	$	22,909	22,909	22,909	—	—

Debt securities, held-to-maturity	24,242		24,389	—	—	24,389
Federal Reserve Bank stock	4,652		4,652	4,652	—	—
Federal Home Loan Bank stock	5,203		5,203	5,203	—	—
Loans, net	1,312,113		1,272,961	—	—	1,272,961
Accrued interest receivable	8,395		8,395	—	8,395	—

FINANCIAL LIABILITIES:
Deposits	1,577,345		1,579,285	1,362,599	216,686	—

Long-term debt	15,000		15,437	—	15,437	—
Accrued interest payable	311		311	—	311	—

December 31, 2020
FINANCIAL ASSETS:
Cash and cash equivalents	$	31,730	31,730	31,730	—	—

Debt securities, held-to-maturity	24,810		24,960	—	—	24,960
Federal Reserve Bank stock	4,652		4,652	4,652	—	—
Federal Home Loan Bank stock	5,203		5,203	5,203	—	—
Loans, net	1,293,693		1,252,642	—	—	1,252,642
Accrued interest receivable	8,337		8,337	—	8,337	—

FINANCIAL LIABILITIES:
Deposits	1,455,423		1,458,413	1,212,903	245,510	—

Long-term debt	22,000		22,595	—	22,595	—
Accrued interest payable	452		452	—	452	—

- 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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