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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.   20549

FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                                        to                                                      

Commission File Number 001-35292
LCNB Corp.
(Exact name of registrant as specified in its charter)
Ohio  31-1626393
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)

2 North Broadway, Lebanon, Ohio 45036
(Address of principal executive offices, including Zip Code)

(513) 932-1414
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, No Par ValueLCNBNASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
            ☒ Yes         No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
            ☒ Yes         No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐                            Accelerated filer
Non-accelerated filer ☒                             Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
             Yes         No
The number of shares outstanding of the issuer's common stock, without par value, as of August 9, 2022 was 11,355,250 shares.


LCNB CORP. AND SUBSIDIARIES

TABLE OF CONTENTS
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  










1

Glossary of Abbreviations and Acronyms
ASCAccounting Standards Codification
ASUAccounting Standards Update
BankLCNB National Bank
CARES ActCoronavirus Aid, Relief, and Economic Security Act
CEOChief Executive Officer
CFOChief Financial Officer
CompanyLCNB Corp. and its consolidated subsidiaries as a whole
Dodd-Frank ActDodd-Frank Wall Street Reform and Consumer Protection Act
Economic Aid ActEconomic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
FASBFinancial Accounting Standards Board
FDICFederal Deposit Insurance Corporation
FHLBFederal Home Loan Bank
FOMCFederal Open Market Committee of the Federal Reserve System
GAAPGenerally Accepted Accounting Principles
ICSInsured Cash Sweep
IRAIndividual Retirement Account
LCNBLCNB Corp. and its consolidated subsidiaries as a whole
LIHTCLow Income Housing Tax Credit
OCCOffice of the Comptroller of the Currency
PPPPaycheck Protection Program
SBASmall Business Administration
SECSecurities and Exchange Commission
TDRsTroubled Debt Restructurings
    

2

PART I – FINANCIAL INFORMATION
 
Item 1.Financial Statements

LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands, except per share data)
June 30, 2022December 31,
2021
(Unaudited)
ASSETS:
Cash and due from banks$20,391 16,810 
Interest-bearing demand deposits11,424 1,326 
Total cash and cash equivalents31,815 18,136 
Investment securities:  
Equity securities with a readily determinable fair value, at fair value2,250 2,546 
Equity securities without a readily determinable fair value, at cost2,099 2,099 
Debt securities, available-for-sale, at fair value301,232 308,177 
Debt securities, held-to-maturity, at cost22,516 22,972 
Federal Reserve Bank stock, at cost4,652 4,652 
Federal Home Loan Bank stock, at cost5,203 5,203 
Loans, net1,367,644 1,363,939 
Premises and equipment, net34,519 35,385 
Operating lease right-of-use assets6,101 6,357 
Goodwill59,221 59,221 
Core deposit and other intangibles, net2,178 2,473 
Bank owned life insurance43,758 43,224 
Interest receivable7,448 7,999 
Other assets, net21,991 21,246 
TOTAL ASSETS$1,912,627 1,903,629 
LIABILITIES:  
Deposits:  
Noninterest-bearing$499,124 501,531 
Interest-bearing1,159,701 1,127,288 
Total deposits1,658,825 1,628,819 
Short-term borrowings5,000  
Long-term debt25,000 10,000 
Operating lease liabilities6,227 6,473 
Accrued interest and other liabilities14,615 19,733 
TOTAL LIABILITIES1,709,667 1,665,025 
COMMITMENTS AND CONTINGENT LIABILITIES  
SHAREHOLDERS' EQUITY:  
Preferred shares – no par value, authorized 1,000,000 shares, none outstanding
  
Common shares – no par value; authorized 19,000,000 shares; issued 14,258,074 and 14,213,792 shares at June 30, 2022 and December 31, 2021, respectively; outstanding 11,374,515 and 12,414,956 shares at June 30, 2022 and December 31, 2021, respectively
143,635 143,130 
Retained earnings131,894 126,312 
Treasury shares at cost, 2,883,559 and 1,798,836 shares at June 30, 2022 and December 31, 2021, respectively
(50,629)(29,029)
Accumulated other comprehensive loss, net of taxes(21,940)(1,809)
TOTAL SHAREHOLDERS' EQUITY202,960 238,604 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$1,912,627 1,903,629 

The accompanying notes to consolidated condensed financial statements are an integral part of these statements.
3

LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended 
June 30,
 2022202120222021
INTEREST INCOME:
Interest and fees on loans$14,548 14,108 28,334 28,643 
Dividends on equity securities:
With a readily determinable fair value14 13 26 26 
Without a readily determinable fair value5 5 10 11 
Interest on debt securities:
Taxable1,254 905 2,349 1,623 
Non-taxable188 218 377 442 
Other investments199 180 234 219 
TOTAL INTEREST INCOME16,208 15,429 31,330 30,964 
INTEREST EXPENSE:    
Interest on deposits775 945 1,514 1,973 
Interest on short-term borrowings163 1 249 2 
Interest on long-term debt103 114 177 248 
TOTAL INTEREST EXPENSE1,041 1,060 1,940 2,223 
NET INTEREST INCOME15,167 14,369 29,390 28,741 
PROVISION (CREDIT) FOR LOAN LOSSES377 (15)426 (67)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES14,790 14,384 28,964 28,808 
NON-INTEREST INCOME:    
Fiduciary income1,643 1,735 3,338 3,264 
Service charges and fees on deposit accounts1,546 1,519 2,952 2,885 
Bank owned life insurance income269 269 534 536 
Gains from sales of loans64 151 188 194 
Other operating income6 640 66 900 
TOTAL NON-INTEREST INCOME3,528 4,314 7,078 7,779 
NON-INTEREST EXPENSE:    
Salaries and employee benefits7,014 7,111 14,229 13,544 
Equipment expenses428 443 836 811 
Occupancy expense, net735 729 1,510 1,523 
State financial institutions tax437 437 873 881 
Marketing368 357 630 625 
Amortization of intangibles112 260 252 517 
FDIC insurance premiums, net134 123 260 236 
Contracted services679 623 1,289 1,163 
Other real estate owned, net(879)1 (879)2 
Other non-interest expense2,441 2,124 4,719 4,398 
TOTAL NON-INTEREST EXPENSE11,469 12,208 23,719 23,700 
INCOME BEFORE INCOME TAXES6,849 6,490 12,323 12,887 
PROVISION FOR INCOME TAXES1,231 1,200 2,182 2,357 
NET INCOME$5,618 5,290 10,141 10,530 
Dividends declared per common share$0.20 0.19 0.40 0.38 
Earnings per common share:    
Basic$0.49 0.41 0.87 0.82 
Diluted0.49 0.41 0.87 0.82 
Weighted average common shares outstanding:    
Basic11,337,805 12,743,726 11,576,873 12,769,131 
Diluted11,337,805 12,743,726 11,576,873 12,769,146 

The accompanying notes to consolidated condensed financial statements are an integral part of these statements.
4

LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended 
June 30,
 2022202120222021
Net income$5,618 5,290 10,141 10,530 
Other comprehensive income (loss):    
Net unrealized gain (loss) on available-for-sale debt securities (net of taxes of $(1,846) and $255 for the three months ended June 30, 2022 and 2021, respectively, and $(5,352) and $(660) for the six months ended June 30, 2022 and 2021, respectively)
(6,945)958 (20,134)(2,483)
Change in nonqualified pension plan unrecognized net gain and unrecognized prior service cost (net of taxes of $ and $1 for the three months ended June 30, 2022 and 2021, respectively, and $1 and $1 for the six months ended June 30, 2022 and 2021, respectively)
2 2 3 3 
  Other comprehensive income (loss), net of tax(6,943)960 (20,131)(2,480)
TOTAL COMPREHENSIVE INCOME (LOSS)$(1,325)6,250 (9,990)8,050 

The accompanying notes to consolidated condensed financial statements are an integral part of these statements.

5

LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands, except per share data)
(Unaudited)
 Common Shares OutstandingCommon StockRetained
Earnings
Treasury
Shares
Accumulated Other Comprehensive Income (Loss)Total Shareholders'
Equity
Three Months Ended June 30, 2022
Balance at March 31, 202211,401,503 $143,432 128,555 (50,115)(14,997)206,875 
Net income  5,618   5,618 
Other comprehensive loss, net of taxes   (6,943)(6,943)
Dividend Reinvestment and Stock Purchase Plan6,047 96   96 
Repurchase of common stock(33,035)(514)(514)
Compensation expense relating to restricted stock 107 107 
Common stock dividends, $0.20 per share
  (2,279)  (2,279)
Balance at June 30, 202211,374,515 $143,635 131,894 (50,629)(21,940)202,960 
Six Months Ended June 30, 2022
Balance at December 31, 202112,414,956 $143,130 126,312 (29,029)(1,809)238,604 
Net income  10,141   10,141 
Other comprehensive loss, net of taxes   (20,131)(20,131)
Dividend Reinvestment and Stock Purchase Plan11,728 201   201 
Repurchase of common stock(1,084,723)(21,600)(21,600)
Compensation expense relating to restricted stock32,554 304 304 
Common stock dividends, $0.40 per share
  (4,559)  (4,559)
Balance at June 30, 202211,374,515 $143,635 131,894 (50,629)(21,940)202,960 
Three Months Ended June 30, 2021
Balance at March 31, 202112,820,108 $142,639 117,863 (21,859)603 239,246 
Net income  5,290   5,290 
Other comprehensive income, net of taxes    960 960 
Dividend Reinvestment and Stock Purchase Plan5,720 100    100 
Repurchase of common stock(190,983)(3,263)(3,263)
Compensation expense relating to restricted stock 52 52 
Common stock dividends, $0.19 per share
  (2,433)  (2,433)
Balance at June 30, 202112,634,845 $142,791 120,720 (25,122)1,563 239,952 
Six Months Ended June 30, 2021
Balance at December 31, 202012,858,325 $142,443 115,058 (20,719)4,043 240,825 
Net income  10,530   10,530 
Other comprehensive loss, net of taxes    (2,480)(2,480)
Dividend Reinvestment and Stock Purchase Plan11,192 199    199 
Repurchase of common stock(261,304)(4,403)(4,403)
Exercise of stock options311 4  4 
Compensation expense relating to restricted stock26,321 145 145 
Common stock dividends, $0.38 per share
  (4,868)  (4,868)
Balance at June 30, 202112,634,845 $142,791 120,720 (25,122)1,563 239,952 

The accompanying notes to consolidated condensed financial statements are an integral part of these statements.
6

LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended 
June 30,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$10,141 10,530 
Adjustments to reconcile net income to net cash flows from operating activities:  
Depreciation, amortization, and accretion1,500 989 
Provision (credit) for loan losses426 (67)
Deferred income tax provision24 356 
Increase in cash surrender value of bank owned life insurance(534)(536)
(Gain) loss from equity securities304 (90)
Realized gain from sales of premises and equipment(15)(5)
Impairment charge recognized on premises and equipment140  
Realized gain from sales of other real estate owned(889) 
Origination of mortgage loans for sale(8,468)(7,591)
Realized gains from sales of loans(188)(194)
Proceeds from sales of mortgage loans8,563 7,690 
Compensation expense related to restricted stock304 145 
Changes in:  
Accrued interest receivable551 (58)
Other assets3,400 (180)
Other liabilities(3,929)(3,431)
TOTAL ADJUSTMENTS1,189 (2,972)
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES11,330 7,558 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Proceeds from maturities and calls of debt securities:
Available-for-sale13,679 16,592 
Held-to-maturity1,211 1,508 
Purchases of equity securities(8)(9)
Purchases of debt securities:
Available-for-sale(32,789)(121,604)
Held-to-maturity(755)(940)
Net increase in loans(4,391)(16,855)
Proceeds from sale of other real estate owned1,605  
Purchases of premises and equipment(283)(930)
Proceeds from sale of premises and equipment32 5 
NET CASH FLOWS USED IN INVESTING ACTIVITIES(21,699)(122,233)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Net increase in deposits30,006 121,922 
Net increase in short-term borrowings5,000  
Proceeds from long-term debt15,000  
Principal payments on long-term debt (7,000)
Proceeds from issuance of common stock201 16 
Repurchase of common stock(21,600)(4,403)
Proceeds from exercise of stock options 4 
Cash dividends paid on common stock(4,559)(4,685)
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES24,048 105,854 
NET CHANGE IN CASH AND CASH EQUIVALENTS13,679 (8,821)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD18,136 31,730 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$31,815 22,909 
SUPPLEMENTAL CASH FLOW INFORMATION:  
Interest paid$1,930 2,365 
Income taxes paid, net of refunds1,332 2,290 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:  
Transfer from loans to other real estate owned716  
Right-of-use assets obtained in exchange for lease obligations 801 

The accompanying notes to consolidated condensed financial statements are an integral part of these statements.
7

LCNB CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

Note 1 - Basis of Presentation
 
Basis of Presentation
The accompanying unaudited interim consolidated condensed financial statements include LCNB Corp. and its wholly-owned subsidiaries: LCNB National Bank and LCNB Risk Management, Inc., its captive insurance company. All material intercompany transactions and balances are eliminated in consolidation.

The unaudited interim consolidated condensed financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the SEC.  Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations.  In the opinion of management, the unaudited interim consolidated financial statements include all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation of financial position, results of consolidated operations, and cash flows for the interim periods, as required by Regulation S-X, Rule 8-03.

The consolidated condensed balance sheet as of December 31, 2021 has been derived from the audited consolidated balance sheet as of that date.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements, accounting policies, and financial notes thereto included in LCNB's 2021 Annual Report on Form 10-K filed with the SEC.

Accounting Changes
From time to time the FASB issues an ASU to communicate changes to U.S. GAAP. The following information provides brief summaries of ASUs that have recently become effective:

Financial Accounting Standards (“FASB”) Accounting Standards Update (“ASU”) No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting"
ASU No. 2020-04 was issued in March 2020 and provides optional guidance for a limited period of time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. LCNB does not expect the guidance in ASU No. 2020-04 will have a material impact on its results of consolidated operations or financial position.

ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans"
ASU No. 2018-14 was issued in August 2018 and was adopted by LCNB on January 1, 2021. The amendments in this update modify disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans, including the deletion, modification, and addition of certain targeted disclosures. The amendments are to be applied on a retrospective basis to all periods presented upon adoption. Adoption of ASU No. 2018-14 did not have a material impact on LCNB's results of consolidated operations or financial position.




8

LCNB CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)

Note 1 - Basis of Presentation (continued)

ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes"
ASU No. 2019-12 was issued in December 2019 and adopted by LCNB on January 1, 2021. It simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifies and amends certain other guidance. Adoption of ASU No. 2019-12 did not have a material impact on LCNB's results of consolidated operations or financial position.

Recent Accounting Pronouncements
The following information provides brief summaries of newly issued but not yet effective ASUs that could have an effect on LCNB’s financial position or results of consolidated operations:

ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments"
ASU No. 2016-13 was issued in June 2016 and, once effective, will significantly change current guidance for recognizing impairment of financial instruments. Current guidance requires an "incurred loss" methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU No. 2016-13 replaces the incurred loss impairment methodology with a new current expected credit loss ("CECL") methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required.

ASU No. 2016-13 also amends the accounting for credit losses on debt securities, available-for-sale, and purchased financial assets with credit deterioration. Under the new guidance, entities will determine whether all or a portion of the unrealized loss on an available-for-sale debt security is a credit loss. Any credit loss will be recognized as an allowance for credit losses on debt securities, available-for-sale, rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. As a result, entities will recognize improvements to estimated credit losses on debt securities, available-for-sale, immediately in earnings rather than as interest income over time, as currently required.

ASU No. 2016-13 eliminates the current accounting model for purchased credit impaired loans and debt securities. Instead, purchased financial assets with credit deterioration will be recorded gross of estimated credit losses as of the date of acquisition and the estimated credit losses amounts will be added to the allowance for credit losses. Thereafter, entities will account for additional impairment of such purchased assets using the models listed above.
Originally, ASU No. 2016-13 would have taken effect for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. At their meeting on October 16, 2019, FASB approved a final ASU delaying the effective date for several major standards, including ASU No. 2016-13, if certain qualifications are met. The new effective date for SEC filers eligible to be smaller reporting companies ("SRC"), as defined, will be fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted. As an SRC, LCNB intends to adopt ASU No. 2016-13 for the fiscal year, and interim periods within the fiscal year, beginning after December 15, 2022.

LCNB has created a cross-functional CECL Committee, which reports to the Audit Committee, composed of members from the lending, Wealth Management, and finance departments. During 2017, the CECL Committee selected a vendor to assist in implementation of and ongoing compliance with the new requirements. It has completed analyzing its data collection efforts, selected a calculation model, analyzed its pool segmentation and reporting mechanisms, and has finished back testing in preparation for adoption of the new methodology. While the committee and management expect that implementation of ASU No. 2016-13 will increase the balance of the allowance for loan losses, they are continuing to evaluate the modeling and its potential impact on LCNB's results of consolidated operations and financial position. The consolidated financial statement impact of this new standard cannot be reasonably estimated at this time; however, it is anticipated during 2022 that modeling adjustments should be complete after finalizing review of prepayment, curtailment, and forecasting assessments.





9

LCNB CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)

Note 1 - Basis of Presentation (continued)

ASU No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures"
ASU No. 2022-02 was issued in March 2022 and, once effective, will eliminate the accounting guidance on TDRs for creditors who have adopted ASU No. 2016-13 and provides for enhanced disclosures for certain modifications to borrowers experiencing financial difficulties. The update also amends the guidance on vintage disclosures for public business entities, as defined, to require the disclosure of current-period gross charge-offs by year of origination. For entities that have adopted ASU No. 2016-13, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not yet adopted ASU No. 2016-13, this update needs to be adopted at the same time that ASU No. 2016-13 is adopted. Early adoption is permitted if an entity has already adopted ASU No. 2016-13.

ASU No. 2022-03, "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions"
ASU No. 2022-03 was issued in June 2022 and, once effective, will clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of the security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The update clarifies that a sales restriction is not considered in measuring fair value. In addition an entity will need to disclose the fair value of equity securities subject to contractual sales restrictions, the nature and remaining durations of the sales restrictions, and any circumstances that could cause a lapse in the restrictions. For public business entities, ASU No.2022-03 is effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. Early adoption is permitted. The amendments are to be applied prospectively with any adoption adjustments recognized in earnings and disclosed on the date of adoption.
10

LCNB CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)


Note 2 - Investment Securities
 
The amortized cost and estimated fair value of equity and debt securities at June 30, 2022 and December 31, 2021 are summarized as follows (in thousands):
 Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
June 30, 2022
Debt Securities, Available-for-Sale:
U.S. Treasury notes$85,052 1 6,413 78,640 
U.S. Agency notes89,246  8,480 80,766 
Corporate bonds6,700  651 6,049 
U.S. Agency mortgage-backed securities92,602 10 7,930 84,682 
Municipal securities:    
Non-taxable9,259 12 317 8,954 
Taxable45,802 39 3,700 42,141 
 $328,661 62 27,491 301,232 
Debt Securities, Held-to-Maturity:
Municipal securities:
Non-taxable$18,947 6 600 18,353 
Taxable3,569  387