Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments [Abstract]

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, 2012 and December 31, 2011 (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)	Total Gains (Losses)
June 30, 2012
Recurring fair value measurements:
Investment securities available-for-sale:
U.S. Treasury notes		$	21,169	21,169	-	-
U.S. Agency notes			101,242	-	101,242	-
U.S. Agency mortgage-backed securities			58,297	-	58,297	-
Corporate securities			6,332	4,140	2,192	-
Municipal securities:
Non-taxable			73,233	-	73,233	-
Taxable			21,178	-	21,178	-
Mutual funds			2,153	-	1,153	1,000
Trust preferred securities			515	515	-	-
Equity securities			1,022	1,022	-	-
Total recurring fair value measurements		$	285,141	26,846	257,295	1,000
Nonrecurring fair value measurements:
Impaired loans		$	1,944	-	830	1,114	-
Other real estate owned and repossessed     assets (a) (b)			2,123	-	2,123	-	(79)
Total nonrecurring fair value measurements		$	4,067	-	2,953	1,114	(79)
December 31, 2011
Recurring fair value measurement:
Investment securities available-for-sale:
U.S. Treasury notes		$	17,550	17,550	-	-
U.S. Agency notes			82,927	-	82,927	-
U.S. Agency mortgage-backed securities			52,287	-	52,287	-
Corporate securities			6,365	4,152	2,213	-
Municipal securities:
Non-taxable			69,703	-	69,703	-
Taxable			21,907	-	21,907	-
Mutual funds			2,125	-	1,125	1,000
Trust preferred securities			564	564	-	-
Equity securities			578	578	-	-
Total recurring fair value measurements		$	254,006	22,844	230,162	1,000
Nonrecurring fair value measurements:
Impaired loans		$	2,563	-	1,300	1,263	-
Other real estate owned and repossessed     assets (c)			1,642	-	1,619	23	31
Total nonrecurring fair value measurements		$	4,205	-	2,919	1,286	31
(a)	Two other real estate owned properties with a total carrying amount of $1,619,000 were written down to their combined fair value of $1,543,000, resulting in an impairment charge of $76,000, which was included in other non-interest expense for the period.
(b)	Repossessed assets with a carrying value of $23,000 were sold for a combined total of $20,000, resulting in a net loss of $3,000, which was included in other non-interest expense for the period.
(c)	Repossessed assets with a carrying value of $117,000 were sold for a combined total of $148,000, resulting in a net gain of $31,000, which was included in other non-interest expense for the period.

Reconciliation of the beginning and ending balances of recurring fair value measurements that use significant unobservable inputs (level 3)

The following table is a reconciliation of the beginning and ending balances of recurring fair value measurements that use significant unobservable inputs (level 3) for the six months ended June 30, 2011 (in thousands):

		Mutual Funds
Beginning balance	$	1,053
Purchases		500
Dividends reinvested		17
Net change in unrealized gains (losses)   included in other comprehensive income		11
Ending balance	$	1,581

Carrying amounts and estimated fair values of financial instruments

Carrying amounts and estimated fair values of financial instruments as of June 30, 2012 and December 31, 2011 are as follows (in thousands):

		June 30, 2012				December 31, 2011
	Carrying		Fair		Carrying		Fair
		Amount		Value	Amount		Value
FINANCIAL ASSETS:
Cash and cash equivalents	$	26,896		26,896		19,535	19,535
Investment securities:
Available-for-sale		285,141		285,141		254,006	254,006
Held-to-maturity		11,474		11,474		10,734	10,734
Federal Reserve Bank stock		949		949		940	940
Federal Home Loan Bank stock		2,091		2,091		2,091	2,091
Loans, net		458,629		______		458,331	470,846
FINANCIAL LIABILITIES:
Deposits		710,656		______		663,562	669,383
Short-term borrowings		13,142		13,142		21,596	21,596
Long-term debt		20,391		______		21,373	22,570

Summary of categorization by inputs level of LCNB's financial assets liabilities not recorded at fair value but for which fair value is disclosed [Table Text Block]

The following table summarizes the categorization by input level as of June 30, 2012 and December 31, 2011 of LCNB's financial assets and liabilities not recorded at fair value but for which fair value is disclosed (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, 2012
Assets:
Loans, net	$	______	-	______	-
Investment securities, non-taxable,     held-to-maturity		11,474	-	-	11,474
Federal Reserve Bank stock		949	949	-	-
Federal Home Loan Bank stock		2,091	2,091	-	-
Liabilities:
Deposits		______	-	______	-
Long-term debt		______	-	______	-
December 31, 2011
Assets:
Loans, net	$	468,283	-	468,283	-
Investment securities, non-taxable,     held-to-maturity		10,734	-	-	10,734
Federal Reserve Bank stock		940	940	-	-
Federal Home Loan Bank stock		2,091	2,091	-	-
Liabilities:
Deposits		669,383	-	669,383	-
Long-term debt		22,570	-	22,570	-