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												Six Months Ended
	6/30/2015			3/31/2015			12/31/2014		9/30/2014		6/30/2014		6/30/2015		6/30/2014
Condensed Income Statement
Interest income	$	11,348		$	10,090		10,367		9,906		9,926		21,438		19,204
Interest expense	748			762			844		911		920		1,510		1,835
Net interest income	10,600			9,328			9,523		8,995		9,006		19,928		17,369
Provision for loan losses	677			69			193		401		255		746		336
Net interest income after provision	9,923			9,259			9,330		8,594		8,751		19,182		17,033
Non-interest income	2,831			2,306			2,449		2,315		2,301		5,137		4,378
Non-interest expense	8,426			7,649			7,334		7,238		7,600		16,075		16,272
Income before income taxes	4,328			3,916			4,445		3,671		3,452		8,244		5,139
Provision for income taxes	1,205			1,082			1,228		953		841		2,287		1,205
Net income	$	3,123		2,834			3,217		2,718		2,611		5,957		3,934
Per Share Data
Dividends per share	$	0.16		0.16			0.16		0.16		0.16		0.32		0.32
Basic earnings per share	$	0.33		0.30			0.34		0.30		0.28		0.63		0.42
Diluted earnings per share	$	0.32		0.30			0.34		0.29		0.28		0.62		0.42
Book value per share	$	13.91		13.80			13.50		13.24		13.18		13.91		13.18
Tangible book value per share	$	10.33		10.40			10.08		9.80		9.73		10.33		9.73
Average basic shares outstanding	9,694,732			9,312,636			9,306,382		9,299,691		9,293,382		9,504,739		9,290,905
Average diluted shares outstanding	9,804,728			9,410,774			9,403,013		9,405,013		9,402,343		9,609,050		9,407,964
Shares outstanding at period end	9,896,904			9,317,583			9,311,318		9,305,208		9,298,270		9,896,904		9,298,270
Selected Financial Ratios
Return on average assets	1.03		%	1.02		%	1.14	%	0.95	%	0.91	%	1.02	%	0.72	%
Return on average equity	9.21		%	9.01		%	10.18	%	8.71	%	8.60	%	9.11	%	6.57	%
Dividend payout ratio	48.48		%	53.33		%	47.06	%	53.33	%	57.14	%	50.79	%	76.19	%
Net interest margin (tax equivalent)	3.95		%	3.83		%	3.82	%	3.57	%	3.59	%	3.89	%	3.62	%
Efficiency ratio (tax equivalent)	61.08		%	63.90		%	59.48	%	61.97	%	65.26	%	62.39	%	72.58	%
Selected Balance Sheet Items
Investment securities and stock	$	378,651		329,429			314,074		322,341		357,567
Loans:
Commercial and industrial	$	47,958		36,447			35,424		34,997		38,919
Commercial, secured by real estate	399,551			381,371			379,141		371,533		377,806
Residential real estate	273,249			255,926			254,087		248,113		243,966
Consumer	19,718			17,296			18,006		19,305		20,015
Agricultural	13,434			9,816			11,472		9,249		8,466
Other, including deposit overdrafts	638			678			680		2,651		2,594
Deferred net origination costs (fees)	188			151			146		67		(47	)
Loans, gross	754,736			701,685			698,956		685,915		691,719
Less allowance for loan losses	2,879			2,837			3,121		3,298		3,394
Loans, net	$	751,857		698,848			695,835		682,617		688,325
Total assets	$	1,249,363		1,129,497			1,108,066		1,123,356		1,151,109
Total deposits	1,084,033			973,725			946,205		956,633		986,824
Short-term borrowings	12,731			13,454			16,645		24,954		23,523
Long-term debt	6,085			6,153			11,357		11,432		11,506
Total shareholders’ equity	137,698			128,576			125,695		123,179		122,584

	Three Months Ended											Six Months Ended
	6/30/2015			3/31/2015		12/31/2014		9/30/2014		6/30/2014		6/30/2015		6/30/2014
Selected Balance Sheet Items, continued
Tangible common equity (TCE)	$	101,694		96,340		93,277		90,579		89,800
Tangible common assets (TCA)	1,213,359			1,097,261		1,075,648		1,090,756		1,118,325
TCE/TA	8.38		%	8.78	%	8.67	%	8.30	%	8.03	%
Loans to deposit ratio	69.62		%	72.06	%	73.87	%	71.70	%	70.10	%
Equity to assets ratio	11.02		%	11.38	%	11.34	%	10.97	%	10.65	%
Selected Average Balance Sheet Items
Investment securities and stock	$	360,750		313,279		311,395		348,469		347,837		337,146		325,438
Loans	$	737,021		699,959		694,185		688,972		685,581		718,592		666,663
Less allowance for loan losses	2,865			2,870		3,075		3,288		3,367		2,868		3,369
Net loans	$	734,156		697,089		691,110		685,684		682,214		715,724		663,294
Total assets	$	1,220,938		1,125,326		1,123,949		1,140,922		1,145,300		1,173,307		1,108,454
Total deposits	1,057,818			969,658		967,505		976,109		991,809		1,013,982		957,123
Short-term borrowings	12,803			13,824		12,217		22,547		13,601		13,310		12,215
Long-term debt	6,108			6,598		11,382		11,457		11,531		6,352		11,675
Total shareholders’ equity	136,003			127,608		125,302		123,807		121,725		131,829		120,847
Asset Quality
Net charge-offs	$	636		352		370		496		232
Other real estate owned	1,364			1,364		1,370		1,460		1,906
Non-accrual loans	1,961			3,972		5,599		6,264		6,243
Loans past due 90 days or more and still accruing	128			355		203		111		130
Total nonperforming loans	$	2,089		4,327		5,802		6,375		6,373
Net charge-offs to average loans	0.35		%	0.20	%	0.21	%	0.29	%	0.14	%
Allowance for loan losses to total loans	0.38		%	0.40	%	0.45	%	0.48	%	0.49	%
Nonperforming loans to total loans	0.28		%	0.62	%	0.83	%	0.93	%	0.92	%
Nonperforming assets to total assets	0.28		%	0.50	%	0.65	%	0.70	%	0.72	%
Assets Under Management
LCNB Corp. total assets	$	1,249,363		1,129,497		1,108,066		1,123,356		1,151,109
Trust and investments (fair value)	272,209			264,122		258,266		255,409		267,857
Mortgage loans serviced	117,204			116,534		120,433		123,792		128,855
Business cash management	6,628			5,839		5,811		5,846		6,307
Brokerage accounts (fair value)	144,186			141,439		132,823		127,303		126,069
Total assets managed	$	1,789,590		1,657,431		1,625,399		1,635,706		1,680,197
Non-GAAP Financial Measures
Accreted income on acquired loans	$	1,348		326		442		375		361		1,674		736
Net income	$	3,123		2,834		3,217		2,718		2,611		5,957		3,934
Less (add) net gain (loss) on sales of securities, net of tax	146			73		37		64		0		219		(3	)
Add merger-related expenses, net of tax	363			50		26		3		46		429		899
Core net income	$	3,340		2,811		3,206		2,657		2,657		6,167		4,836
Basic core earnings per share	$	0.34		0.30		0.34		0.29		0.29		0.65		0.52
Diluted core earnings per share	$	0.34		0.30		0.34		0.28		0.28		0.64		0.51
Adjusted return on average assets	1.10		%	1.01	%	1.13	%	0.92	%	0.93	%	1.06	%	0.88	%
Adjusted return on average equity	9.85		%	8.86	%	10.06	%	8.44	%	8.67	%	9.43	%	8.02	%
Core efficiency ratio (tax equivalent)	58.23		%	63.91	%	59.48	%	62.46	%	64.66	%	60.88	%	66.50	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	June 30, 2015 (Unaudited)			December 31, 2014
ASSETS:
Cash and due from banks	$	21,195		14,235
Interest-bearing demand deposits	6,718			1,610
Total cash and cash equivalents	27,913			15,845
Investment securities:
Available-for-sale, at fair value	347,860			285,365
Held-to-maturity, at cost	24,677			22,725
Federal Reserve Bank stock, at cost	2,476			2,346
Federal Home Loan Bank stock, at cost	3,638			3,638
Loans, net	751,857			695,835
Premises and equipment, net	22,591			20,733
Goodwill	30,187			27,638
Core deposit and other intangibles	5,817			4,780
Bank owned life insurance	22,250			21,936
Other assets	10,097			7,225
TOTAL ASSETS	$	1,249,363		1,108,066
LIABILITIES:
Deposits:
Noninterest-bearing	$	228,743		213,303
Interest-bearing	855,290			732,902
Total deposits	1,084,033			946,205
Short-term borrowings	12,731			16,645
Long-term debt	6,085			11,357
Accrued interest and other liabilities	8,816			8,164
TOTAL LIABILITIES	1,111,665			982,371
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 10,650,531 and 10,064,945 shares at June 30, 2015 and December 31, 2014, respectively	76,607			67,181
Retained earnings	72,281			69,394
Treasury shares at cost, 753,627 shares at June 30, 2015 and December 31, 2014	(11,665		)	(11,665	)
Accumulated other comprehensive loss, net of taxes	475			785
TOTAL SHAREHOLDERS' EQUITY	137,698			125,695
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,249,363		1,108,066

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended   June 30,			Six Months Ended   June 30,
	2015		2014	2015	2014
INTEREST INCOME:
Interest and fees on loans	$	9,492	8,144	18,032	15,840
Interest on investment securities –
Taxable	1,033		1,026	1,889	1,917
Non-taxable	702		657	1,355	1,303
Other short-term investments	121		99	162	144
TOTAL INTEREST INCOME	11,348		9,926	21,438	19,204
INTEREST EXPENSE:
Interest on deposits	671		814	1,353	1,623
Interest on short-term borrowings	4		5	8	8
Interest on long-term debt	73		101	149	204
TOTAL INTEREST EXPENSE	748		920	1,510	1,835
NET INTEREST INCOME	10,600		9,006	19,928	17,369
PROVISION FOR LOAN LOSSES	677		255	746	336
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,923		8,751	19,182	17,033
NON-INTEREST INCOME:
Trust income	852		728	1,652	1,383
Service charges and fees on deposit accounts	1,234		1,252	2,341	2,374
Net gain (loss) on sales of securities	221		—	332	(4	)
Bank owned life insurance income	155		170	314	342
Gains from sales of mortgage loans	219		53	254	68
Other operating income	150		98	244	215
TOTAL NON-INTEREST INCOME	2,831		2,301	5,137	4,378
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,381		3,956	8,671	7,874
Equipment expenses	302		345	590	639
Occupancy expense, net	584		514	1,179	1,165
State franchise tax	250		239	502	483
Marketing	220		197	383	329
Amortization of intangibles	175		148	321	274
FDIC insurance premiums	145		160	296	309
Merger-related expenses	522		70	592	1,362
Other non-interest expense	1,847		1,971	3,541	3,837
TOTAL NON-INTEREST EXPENSE	8,426		7,600	16,075	16,272
INCOME BEFORE INCOME TAXES	4,328		3,452	8,244	5,139
PROVISION FOR INCOME TAXES	1,205		841	2,287	1,205
NET INCOME	$	3,123	2,611	5,957	3,934
Dividends declared per common share	$	0.16	0.16	0.32	0.32
Earnings per common share:
Basic	$	0.33	0.28	0.63	0.42
Diluted	0.32		0.28	0.62	0.42
Weighted average common shares outstanding:
Basic	9,694,732		9,293,382	9,504,739	9,290,905
Diluted	9,804,728		9,402,343	9,609,050	9,407,964