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												Nine Months Ended
	9/30/2015			6/30/2015			3/31/2015		12/31/2014		9/30/2014		9/30/2015		9/30/2014
Condensed Income Statement
Interest income	$	10,409		$	11,348		10,090		10,367		9,906		31,847		29,110
Interest expense	912			748			762		844		911		2,422		2,746
Net interest income	9,497			10,600			9,328		9,523		8,995		29,425		26,364
Provision for loan losses	240			677			69		193		401		986		737
Net interest income after provision	9,257			9,923			9,259		9,330		8,594		28,439		25,627
Non-interest income	2,386			2,831			2,306		2,449		2,315		7,523		6,693
Non-interest expense	8,088			8,426			7,649		7,334		7,238		24,163		23,510
Income before income taxes	3,555			4,328			3,916		4,445		3,671		11,799		8,810
Provision for income taxes	922			1,205			1,082		1,228		953		3,209		2,158
Net income	$	2,633		3,123			2,834		3,217		2,718		8,590		6,652
Per Share Data
Dividends per share	$	0.16		0.16			0.16		0.16		0.16		0.48		0.48
Basic earnings per share	$	0.26		0.33			0.30		0.34		0.30		0.89		0.72
Diluted earnings per share	$	0.26		0.32			0.30		0.34		0.29		0.88		0.71
Book value per share	$	14.22		13.91			13.80		13.50		13.24		14.22		13.24
Tangible book value per share	$	10.66		10.33			10.40		10.08		9.80		10.66		9.80
Average basic shares outstanding	9,898,233			9,694,732			9,312,636		9,306,382		9,299,691		9,637,344		9,293,866
Average diluted shares outstanding	10,005,788			9,804,728			9,410,774		9,403,013		9,405,013		9,742,839		9,407,110
Shares outstanding at period end	9,903,294			9,896,904			9,317,583		9,311,318		9,305,208		9,903,294		9,305,208
Selected Financial Ratios
Return on average assets	0.82		%	1.03		%	1.02	%	1.14	%	0.95	%	0.95	%	0.79	%
Return on average equity	7.51		%	9.21		%	9.01	%	10.18	%	8.71	%	8.55	%	7.30	%
Dividend payout ratio	61.54		%	48.48		%	53.33	%	47.06	%	53.33	%	53.93	%	66.67	%
Net interest margin (tax equivalent)	3.37		%	3.95		%	3.83	%	3.82	%	3.57	%	3.71	%	3.60	%
Efficiency ratio (tax equivalent)	65.97		%	61.08		%	63.90	%	59.48	%	61.97	%	63.55	%	68.95	%
Selected Balance Sheet Items
Investment securities and stock	$	391,430		378,651			329,429		314,074		322,341
Loans:
Commercial and industrial	$	45,325		47,958			36,447		35,424		34,997
Commercial, secured by real estate	407,818			399,551			381,371		379,141		371,533
Residential real estate	274,054			273,249			255,926		254,087		248,113
Consumer	19,283			19,718			17,296		18,006		19,305
Agricultural	15,462			13,434			9,816		11,472		9,249
Other, including deposit overdrafts	676			638			678		680		2,651
Deferred net origination costs (fees)	215			188			151		146		67
Loans, gross	762,833			754,736			701,685		698,956		685,915
Less allowance for loan losses	2,958			2,879			2,837		3,121		3,298
Loans, net	$	759,875		751,857			698,848		695,835		682,617
Total assets	$	1,275,171		1,249,363			1,129,497		1,108,066		1,123,356
Total deposits	1,103,513			1,084,033			973,725		946,205		956,633
Short-term borrowings	14,931			12,731			13,454		16,645		24,954
Long-term debt	6,016			6,085			6,153		11,357		11,432
Total shareholders’ equity	140,851			137,698			128,576		125,695		123,179

	Three Months Ended											Nine Months Ended
	9/30/2015			6/30/2015		3/31/2015		12/31/2014		9/30/2014		9/30/2015		9/30/2014
Selected Balance Sheet Items, continued
Tangible common equity (TCE)	$	105,063		101,694		96,340		93,277		90,579
Tangible common assets (TCA)	1,239,383			1,213,359		1,097,261		1,075,648		1,090,756
TCE/TA	8.48		%	8.38	%	8.78	%	8.67	%	8.30	%
Loans to deposit ratio	69.13		%	69.62	%	72.06	%	73.87	%	71.70	%
Equity to assets ratio	11.05		%	11.02	%	11.38	%	11.34	%	10.97	%
Selected Average Balance Sheet Items
Investment securities and stock	$	385,353		360,750		313,279		311,395		348,469		353,391		333,200
Loans	$	760,159		737,021		699,959		694,185		688,972		732,600		674,181
Less allowance for loan losses	2,885			2,865		2,870		3,075		3,288		2,873		3,342
Net loans	$	757,274		734,156		697,089		691,110		685,684		729,727		670,839
Total assets	$	1,267,171		1,220,938		1,125,326		1,123,949		1,140,922		1,204,909		1,119,396
Total deposits	1,099,730			1,057,818		969,658		967,505		976,109		1,042,879		963,521
Short-term borrowings	13,450			12,803		13,824		12,217		22,547		13,358		15,697
Long-term debt	6,040			6,108		6,598		11,382		11,457		6,247		11,602
Total shareholders’ equity	139,032			136,003		127,608		125,302		123,807		134,256		121,845
Asset Quality
Net charge-offs	$	160		636		352		370		496
Other real estate owned	1,208			1,364		1,364		1,370		1,460
Non-accrual loans	2,254			1,961		3,972		5,599		6,264
Loans past due 90 days or more and still accruing	130			128		355		203		111
Total nonperforming loans	$	2,384		2,089		4,327		5,802		6,375
Net charge-offs to average loans	0.08		%	0.35	%	0.20	%	0.21	%	0.29	%
Allowance for loan losses to total loans	0.39		%	0.38	%	0.40	%	0.45	%	0.48	%
Nonperforming loans to total loans	0.31		%	0.28	%	0.62	%	0.83	%	0.93	%
Nonperforming assets to total assets	0.28		%	0.28	%	0.50	%	0.65	%	0.70	%
Assets Under Management
LCNB Corp. total assets	$	1,275,171		1,249,363		1,129,497		1,108,066		1,123,356
Trust and investments (fair value)	258,675			272,209		264,122		258,266		255,409
Mortgage loans serviced	113,610			117,204		116,534		120,433		123,792
Business cash management	6,809			6,628		5,839		5,811		5,846
Brokerage accounts (fair value)	142,151			144,186		141,439		132,823		127,303
Total assets managed	$	1,796,416		1,789,590		1,657,431		1,625,399		1,635,706
Non-GAAP Financial Measures
Accreted income on acquired loans	$	243		1,348		326		442		375		1,917		1,110
Net income	$	2,633		3,123		2,834		3,217		2,718		8,590		6,652
Less (add) net gain (loss) on sales of securities, net of tax	0			146		73		37		64		219		61
Add merger-related expenses, net of tax	32			363		50		26		3		461		902
Core net income	$	2,665		3,340		2,811		3,206		2,657		8,832		7,493
Basic core earnings per share	$	0.27		0.34		0.30		0.34		0.29		0.92		0.81
Diluted core earnings per share	$	0.27		0.34		0.30		0.34		0.28		0.91		0.80
Adjusted return on average assets	0.83		%	1.10	%	1.01	%	1.13	%	0.92	%	0.98	%	0.89	%
Adjusted return on average equity	7.60		%	9.85	%	8.86	%	10.06	%	8.44	%	8.80	%	8.17	%
Core efficiency ratio (tax equivalent)	65.57		%	58.23	%	63.91	%	59.48	%	62.46	%	62.41	%	65.12	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	September 30, 2015 (Unaudited)			December 31, 2014
ASSETS:
Cash and due from banks	$	18,844		14,235
Interest-bearing demand deposits	14,367			1,610
Total cash and cash equivalents	33,211			15,845
Investment securities:
Available-for-sale, at fair value	360,741			285,365
Held-to-maturity, at cost	24,575			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	759,875			695,835
Premises and equipment, net	22,434			20,733
Goodwill	30,187			27,638
Core deposit and other intangibles	5,601			4,780
Bank owned life insurance	22,406			21,936
Other assets	10,027			7,225
TOTAL ASSETS	$	1,275,171		1,108,066
LIABILITIES:
Deposits:
Noninterest-bearing	$	238,796		213,303
Interest-bearing	864,717			732,902
Total deposits	1,103,513			946,205
Short-term borrowings	14,931			16,645
Long-term debt	6,016			11,357
Accrued interest and other liabilities	9,860			8,164
TOTAL LIABILITIES	1,134,320			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 10,656,921 and 10,064,945 shares at September 30, 2015 and December 31, 2014, respectively	76,711			67,181
Retained earnings	73,330			69,394
Treasury shares at cost, 753,627 shares at September 30, 2015 and December 31, 2014	(11,665		)	(11,665	)
Accumulated other comprehensive loss, net of taxes	2,475			785
TOTAL SHAREHOLDERS' EQUITY	140,851			125,695
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,275,171		1,108,066

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended   September 30,			Nine Months Ended   September 30,
	2015		2014	2015	2014
INTEREST INCOME:
Interest and fees on loans	$	8,540	8,168	26,572	24,008
Interest on investment securities –
Taxable	1,094		984	2,983	2,901
Non-taxable	732		716	2,087	2,019
Other short-term investments	43		38	205	182
TOTAL INTEREST INCOME	10,409		9,906	31,847	29,110
INTEREST EXPENSE:
Interest on deposits	834		800	2,187	2,423
Interest on short-term borrowings	5		10	13	18
Interest on long-term debt	73		101	222	305
TOTAL INTEREST EXPENSE	912		911	2,422	2,746
NET INTEREST INCOME	9,497		8,995	29,425	26,364
PROVISION FOR LOAN LOSSES	240		401	986	737
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,257		8,594	28,439	25,627
NON-INTEREST INCOME:
Trust income	754		688	2,406	2,071
Service charges and fees on deposit accounts	1,314		1,245	3,655	3,619
Net gain (loss) on sales of securities	—		97	332	93
Bank owned life insurance income	156		165	470	507
Gains from sales of mortgage loans	34		24	288	92
Other operating income	128		96	372	311
TOTAL NON-INTEREST INCOME	2,386		2,315	7,523	6,693
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,340		4,022	13,011	11,896
Equipment expenses	324		337	914	976
Occupancy expense, net	570		541	1,749	1,706
State franchise tax	251		231	753	714
Marketing	176		212	559	541
Amortization of intangibles	189		150	510	424
FDIC insurance premiums	136		183	432	492
Merger-related expenses	49		4	641	1,366
Other non-interest expense	2,053		1,558	5,594	5,395
TOTAL NON-INTEREST EXPENSE	8,088		7,238	24,163	23,510
INCOME BEFORE INCOME TAXES	3,555		3,671	11,799	8,810
PROVISION FOR INCOME TAXES	922		953	3,209	2,158
NET INCOME	$	2,633	2,718	8,590	6,652
Dividends declared per common share	$	0.16	0.16	0.48	0.48
Earnings per common share:
Basic	$	0.26	0.30	0.89	0.72
Diluted	0.26		0.29	0.88	0.71
Weighted average common shares outstanding:
Basic	9,898,233		9,299,691	9,637,344	9,293,866
Diluted	10,005,788		9,405,013	9,742,839	9,407,110