Note 9 - Employee Benefits

LCNB participates in a noncontributory defined benefit retirement multi-employer plan that covers substantially all regular full-time employees hired before January 1, 2009.

Employees of LCNB also participate in a defined contribution retirement plan. Employees hired on or after January 1, 2009 receive a 50% employer match on their contributions into the 401(k) plan, up to a maximum LCNB contribution of 3% of each individual employee's annual compensation. Employees hired before January 1, 2009 who received a benefit reduction under certain amendments to the defined benefit retirement plan receive an automatic contribution of 5% or 7% of annual compensation, depending on the sum of an employee's age and vesting service, into the 401(k) plan, regardless of the contributions made by the employees. This contribution is made annually and these employees do not receive any employer matches to their 401(k) contributions.

Funding and administrative costs of the qualified noncontributory defined benefit retirement plan and 401(k) plan charged to pension and other employee benefits in the consolidated statements of income for the three and six-month periods ended June 30, 2012 and 2011 are as follows (in thousands):

		For the Three Months			For the Six Months
		Ended June 30,			Ended June 30,
		2012	2011	2012		2011

Qualified noncontributory defined benefit retirement plan	$	149	134	291		258

401(k) plan		74	82	110		157

Certain highly compensated employees participate in a nonqualified defined benefit retirement plan. The nonqualified plan ensures that participants receive the full amount of benefits to which they would have been entitled under the noncontributory defined benefit retirement plan in the absence of limits on benefit levels imposed by certain sections of the Internal Revenue Code.

The components of net periodic pension cost of the nonqualified defined benefit retirement plan for the three and six months ended June 30, 2012 and 2011 are summarized as follows (in thousands):

		Three Months Ended June 30,		Six Months Ended June 30,
		2012	2011	2012	2011
Service cost	$	22	22	44	66
Interest cost		11	8	22	17
Amortization of unrecognized net (gain) loss		5	(8)	10	(12)
Amortization of unrecognized prior service cost		7	7	14	18
Net periodic pension cost	$	45	29	90	89

Amounts recognized in accumulated other comprehensive income, net of deferred federal income taxes, at June 30, 2012 and December 31, 2011 for the nonqualified defined benefit retirement plan consists of (in thousands):

	June 30,		December 31,
	2012		2011
Net actuarial loss	$	142		156
Past service cost		64		74
	$	206		230