LCNB (LCNB) 8-K Results of Operations and Financial Condition

Exhibit 99.2

LCNB Corp. and Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

	Three Months Ended												Year Ended
	12/31/2014			9/30/2014			6/30/2014		3/31/2014		12/31/2013		12/31/2014		12/31/2013
Condensed Income Statement
Interest income	$	10,367		$	9,906		9,926		9,278		8,566		39,477		33,497
Interest expense	844			911			920		915		927		3,590		4,065
Net interest income	9,523			8,995			9,006		8,363		7,639		35,887		29,432
Provision for loan losses	193			401			255		81		219		930		588
Net interest income after provision	9,330			8,594			8,751		8,282		7,420		34,957		28,844
Non-interest income	2,449			2,315			2,301		2,077		2,358		9,142		9,090
Non-interest expense	7,334			7,238			7,600		8,672		6,634		30,844		26,212
Income before income taxes	4,445			3,671			3,452		1,687		3,144		13,255		11,722
Provision for income taxes	1,228			953			841		364		797		3,386		2,942
Net income	$	3,217		2,718			2,611		1,323		2,347		9,869		8,780
Per Share Data
Dividends per share	$	0.16		0.16			0.16		0.16		0.16		0.64		0.64
Basic earnings per share	$	0.34		0.30			0.28		0.14		0.27		1.06		1.12
Diluted earnings per share	$	0.34		0.29			0.28		0.14		0.27		1.05		1.10
Book value per share	$	13.50		13.24			13.18		12.89		12.80		13.50		12.80
Tangible book value per share	$	10.08		9.80			9.71		9.44		11.02		10.08		11.02
Average basic shares outstanding	9,306,382			9,299,691			9,293,382		9,288,400		8,623,134		9,297,019		7,852,514
Average diluted shares outstanding	9,403,013			9,405,013			9,402,343		9,413,049		8,755,416		9,406,346		7,982,997
Shares outstanding at period end	9,311,318			9,305,208			9,298,270		9,292,226		9,287,536		9,311,318		9,287,536
Selected Financial Ratios
Return on average assets	1.14		%	0.95		%	0.91	%	0.50	%	0.98	%	0.88	%	0.93	%
Return on average equity	10.18		%	8.71		%	8.60	%	4.47	%	8.48	%	8.04	%	9.02	%
Dividend payout ratio	47.06		%	53.33		%	57.14	%	114.29	%	59.26	%	60.38	%	57.14	%
Net interest margin (tax equivalent)	3.82		%	3.57		%	3.59	%	3.66	%	3.63	%	3.66	%	3.57	%
Efficiency ratio (tax equivalent)	59.48		%	61.97		%	65.26	%	80.50	%	64.24	%	66.44	%	65.78	%
Selected Balance Sheet Items
Investment securities and stock	$	314,074		322,341			357,567		331,771		279,021
Loans	$	698,956		685,915			691,719		685,196		574,354
Less allowance for loan losses	3,121			3,298			3,394		3,370		3,588
Net loans	$	695,835		682,617			688,325		681,826		570,766
Total assets	$	1,108,066		1,123,356			1,151,109		1,133,508		932,338
Total deposits	946,205			956,633			986,824		984,514		785,761
Short-term borrowings	16,645			24,954			23,523		11,215		8,655
Long-term debt	11,357			11,432			11,506		11,580		12,102
Total shareholders’ equity	125,695			123,179			122,584		119,761		118,873
Tangible common equity (TCE)	$	93,277		90,579			89,800		87,017		101,893
Tangible common assets (TCA)	1,075,648			1,090,756			1,118,325		1,100,764		915,358
TCE/TA	8.67		%	8.30		%	8.03	%	7.91	%	11.13	%
Loans to deposit ratio	73.87		%	71.70		%	70.10	%	69.60	%	73.10	%
Equity to assets ratio	11.34		%	10.97		%	10.65	%	10.57	%	12.75	%

	Three Months Ended											Twelve Months Ended
	12/31/2014			9/30/2014		6/30/2014		3/31/2014		12/31/2013		12/31/2014		12/31/2013
Selected Average Balance Sheet Items
Investment securities and stock	$	311,395		348,469		347,837		302,791		284,630		327,704		295,812
Loans	$	694,185		688,972		685,581		647,535		573,421		679,223		555,602
Less allowance for loan losses	3,075			3,288		3,367		3,372		3,428		3,275		3,401
Net loans	$	691,110		685,684		682,214		644,163		569,993		675,948		552,201
Total assets	$	1,123,949		1,140,922		1,145,300		1,071,198		953,929		1,120,515		944,659
Total deposits	967,505			976,109		991,809		922,051		809,264		964,526		812,037
Short-term borrowings	12,217			22,547		13,601		10,814		17,387		14,820		16,912
Long-term debt	11,382			11,457		11,531		11,821		12,218		11,546		12,768
Total shareholders’ equity	125,302			123,807		121,725		119,959		109,860		122,716		97,349
Asset Quality
Net charge-offs	$	370		496		232		299		54
Other real estate owned	1,370			1,460		1,906		1,799		1,463
Non-accrual loans	5,625			6,264		6,243		5,374		2,961
Loans past due 90 days or more and still accruing	96			111		130		825		250
Total nonperforming loans	$	5,721		6,375		6,373		6,199		3,211
Net charge-offs to average loans	0.21		%	0.29	%	0.14	%	0.19	%	0.04	%
Allowance for loan losses to total loans	0.45		%	0.48	%	0.49	%	0.49	%	0.62	%
Nonperforming loans to total loans	0.82		%	0.93	%	0.92	%	0.90	%	0.56	%
Nonperforming assets to total assets	0.64		%	0.70	%	0.72	%	0.71	%	0.50	%
Assets Under Management
LCNB Corp. total assets	$	1,108,066		1,123,356		1,151,109		1,133,508		932,338
Trust and investments (fair value)	258,266			255,409		267,857		262,666		257,088
Mortgage loans serviced	120,433			123,792		128,855		133,504		90,343
Business cash management	5,811			5,846		6,307		5,871		5,647
Brokerage accounts (fair value)	132,823			127,303		126,069		120,768		115,745
Total assets managed	$	1,625,399		1,635,706		1,680,197		1,656,317		1,401,161
Non-GAAP Financial Measures
Net income	$	3,217		2,718		2,611		1,323		2,347		9,869		8,780
Less (add) net gain (loss) on sales of securities, net of tax	37			64		0		(3	)	203		98		700
Add merger-related expenses, net of tax	26			3		46		853		71		928		981
Core net income	$	3,206		2,657		2,657		2,179		2,215		10,699		9,061
Basic core earnings per share	$	0.34		0.29		0.29		0.23		0.26		1.15		1.15
Diluted core earnings per share	$	0.34		0.28		0.28		0.23		0.25		1.14		1.14
Adjusted return on average assets	1.13		%	0.92	%	0.93	%	0.82	%	0.92	%	0.95	%	0.96	%
Adjusted return on average equity	10.06		%	8.44	%	8.67	%	7.32	%	7.97	%	8.67	%	9.29	%
Core efficiency ratio (tax equivalent)	59.48		%	62.46	%	64.66	%	68.48	%	65.14	%	63.62	%	63.88	%
												��

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

At December 31,

(Dollars in thousands)

	2014 (Unaudited)			2013
ASSETS:
Cash and due from banks	$	14,235		10,410
Interest-bearing demand deposits	1,610			4,278
Total cash and cash equivalents	15,845			14,688
Investment securities:
Available-for-sale, at fair value	285,365			258,241
Held-to-maturity, at cost	22,725			16,323
Federal Reserve Bank stock, at cost	2,346			1,603
Federal Home Loan Bank stock, at cost	3,638			2,854
Loans, net	695,835			570,766
Premises and equipment, net	20,733			19,897
Goodwill	27,638			14,186
Bank owned life insurance	21,936			21,280
Other assets	12,005			12,500
TOTAL ASSETS	$	1,108,066		932,338
LIABILITIES:
Deposits:
Noninterest-bearing	$	213,303		164,912
Interest-bearing	732,902			620,849
Total deposits	946,205			785,761
Short-term borrowings	16,645			8,655
Long-term debt	11,357			12,102
Accrued interest and other liabilities	8,164			6,947
TOTAL LIABILITIES	982,371			813,465
SHAREHOLDERS' EQUITY:
Preferred shares – no par value, authorized 1,000,000 shares, none outstanding	—			—
Common shares – no par value, authorized 12,000,000 shares, issued 10,064,945 and 10,041,163 shares at December 31, 2014 and 2013, respectively	67,181			66,785
Retained earnings	69,394			65,475
Treasury shares at cost, 753,627 shares at December 31, 2014 and 2013	(11,665		)	(11,665	)
Accumulated other comprehensive loss, net of taxes	785			(1,722	)
TOTAL SHAREHOLDERS' EQUITY	125,695			118,873
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,108,066		932,338

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended   December 31,			Year Ended   December 31,
	2014		2013	2014	2013
INTEREST INCOME:
Interest and fees on loans	$	8,698	7,027	32,706	27,325
Interest on investment securities –
Taxable	856		813	3,757	3,369
Non-taxable	694		641	2,713	2,573
Other short-term investments	119		85	301	230
TOTAL INTEREST INCOME	10,367		8,566	39,477	33,497
INTEREST EXPENSE:
Interest on deposits	738		813	3,161	3,602
Interest on short-term borrowings	4		7	22	25
Interest on long-term debt	102		107	407	438
TOTAL INTEREST EXPENSE	844		927	3,590	4,065
NET INTEREST INCOME	9,523		7,639	35,887	29,432
PROVISION FOR LOAN LOSSES	193		219	930	588
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,330		7,420	34,957	28,844
NON-INTEREST INCOME:
Trust income	832		708	2,903	2,518
Service charges and fees on deposit accounts	1,219		1,041	4,838	4,155
Net gain (loss) on sales of securities	56		307	149	1,060
Bank owned life insurance income	164		166	671	678
Gains from sales of mortgage loans	55		34	147	339
Other operating income	123		102	434	340
TOTAL NON-INTEREST INCOME	2,449		2,358	9,142	9,090
NON-INTEREST EXPENSE:
Salaries and employee benefits	3,866		3,704	15,762	13,487
Equipment expenses	340		324	1,316	1,232
Occupancy expense, net	526		513	2,232	2,042
State franchise tax	241		211	955	846
Marketing	162		115	703	561
FDIC insurance premiums	168		124	660	499
Merger-related expenses	34		107	1,400	1,433
Other non-interest expense	1,997		1,536	7,816	6,112
TOTAL NON-INTEREST EXPENSE	7,334		6,634	30,844	26,212
INCOME BEFORE INCOME TAXES	4,445		3,144	13,255	11,722
PROVISION FOR INCOME TAXES	1,228		797	3,386	2,942
NET INCOME	$	3,217	2,347	9,869	8,780
Dividends declared per common share	$	0.16	0.16	0.64	0.64
Earnings per common share:
Basic	$	0.34	0.27	1.06	1.12
Diluted	0.34		0.27	1.05	1.10
Weighted average common shares outstanding:
Basic	9,306,382		8,623,134	9,297,019	7,852,514
Diluted	9,403,013		8,755,416	9,406,346	7,982,997