Investment Securities

6 Months Ended

Jun. 30, 2012

Investment Securities [Abstract]

Investment Securities

Note 2 - Investment Securities

The amortized cost and estimated fair value of available-for-sale investment securities at June 30, 2012 and December 31, 2011 are summarized as follows (in thousands):

	June 30, 2012
		Amortized Cost	Unrealized Gains	Unrealized Losses	Fair Value
U.S. Treasury notes	$	20,848	321	-	21,169
U.S. Agency notes		99,700	1,577	35	101,242
U.S. Agency mortgage-backed securities		56,814	1,498	15	58,297
Corporate securities		6,280	53	1	6,332
Municipal securities:
Non-taxable		69,854	3,427	48	73,233
Taxable		19,983	1,195	-	21,178
Mutual funds		2,118	35	-	2,153
Trust preferred securities		498	26	9	515
Equity securities		977	78	33	1,022
	$	277,072	8,210	141	285,141

	December 31, 2011
		Amortized Cost	Unrealized Gains	Unrealized Losses	Fair Value
U.S. Treasury notes	$	17,385	165	-	17,550
U.S. Agency notes		81,415	1,517	5	82,927
U.S. Agency mortgage-backed securities		50,923	1,475	111	52,287
Corporate securities		6,334	47	16	6,365
Municipal securities:
Non-taxable		65,896	3,827	20	69,703
Taxable		21,027	894	14	21,907
Mutual fund		2,103	22	-	2,125
Trust preferred securities		549	37	22	564
Equity securities		526	57	5	578
	$	246,158	8,041	193	254,006

The fair value of held-to-maturity investment securities, consisting of taxable and non-taxable municipal securities, approximates amortized cost at June 30, 2012 and December 31, 2011.

Information concerning securities with gross unrealized losses at June 30, 2012, aggregated by length of time that individual securities have been in a continuous loss position, is as follows (in thousands):

		Less than Twelve Months		Twelve Months or Greater
		Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
U.S. Treasury notes	$	-	-	-	-
U.S. Agency notes		16,819	35	-	-
U.S. Agency mortgage-    backed securities		4,355	15	-	-
Corporate securities		2,192	1	-	-
Municipal securities:
Non-taxable		5,272	30	2,148	18
Taxable		-	-	-	-
Mutual fund		-	-	-	-
Trust preferred securities		99	1	141	8
Equity securities		415	28	59	5
	$	29,152	110	2,348	31

Management has determined that the unrealized losses at June 30, 2012 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.