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
	12/31/2015			9/30/2015		6/30/2015		3/31/2015		12/31/2014		12/31/2015		12/31/2014
Condensed Income Statement
Interest income	$	10,812		10,409		11,348		10,090		10,367		42,659		39,477
Interest expense	906			912		748		762		844		3,328		3,590
Net interest income	9,906			9,497		10,600		9,328		9,523		39,331		35,887
Provision for loan losses	380			240		677		69		193		1,366		930
Net interest income after provision	9,526			9,257		9,923		9,259		9,330		37,965		34,957
Non-interest income	2,600			2,386		2,831		2,306		2,449		10,123		9,142
Non-interest expense	8,229			8,088		8,426		7,649		7,334		32,392		30,844
Income before income taxes	3,897			3,555		4,328		3,916		4,445		15,696		13,255
Provision for income taxes	1,013			922		1,205		1,082		1,228		4,222		3,386
Net income	$	2,884		2,633		3,123		2,834		3,217		11,474		9,869
Per Share Data
Dividends per share	$	0.16		0.16		0.16		0.16		0.16		0.64		0.64
Basic earnings per share	$	0.29		0.26		0.33		0.30		0.34		1.18		1.06
Diluted earnings per share	$	0.29		0.26		0.32		0.30		0.34		1.17		1.05
Book value per share	$	14.12		14.22		13.91		13.80		13.50		14.12		13.50
Tangible book value per share	$	10.58		10.66		10.33		10.40		10.08		10.58		10.08
Average basic shares outstanding	9,905,612			9,898,233		9,694,732		9,312,636		9,306,382		9,704,965		9,297,019
Average diluted shares outstanding	10,014,908			10,005,788		9,804,728		9,410,774		9,403,013		9,811,476		9,406,346
Shares outstanding at period end	9,925,547			9,903,294		9,896,904		9,317,583		9,311,318		9,925,547		9,311,318
Selected Financial Ratios
Return on average assets	0.89		%	0.82	%	1.03	%	1.02	%	1.14	%	0.94	%	0.88	%
Return on average equity	8.07		%	7.51	%	9.21	%	9.01	%	10.18	%	8.43	%	8.04	%
Dividend payout ratio	55.17		%	61.54	%	48.48	%	53.33	%	47.06	%	54.24	%	60.38	%
Net interest margin (tax equivalent)	3.46		%	3.37	%	3.95	%	3.83	%	3.82	%	3.64	%	3.66	%
Efficiency ratio (tax equivalent)	63.80		%	65.97	%	61.08	%	63.90	%	59.48	%	63.61	%	66.44	%
Selected Balance Sheet Items
Investment securities and stock	$	406,981		391,430		378,651		329,429		314,074
Loans:
Commercial and industrial	$	45,275		45,325		47,958		36,447		35,424
Commercial, secured by real estate	419,633			407,264		399,551		381,371		379,141
Residential real estate	273,139			274,054		273,249		255,926		254,087
Consumer	18,510			19,283		19,718		17,296		18,006
Agricultural	13,479			16,016		13,434		9,816		11,472
Other, including deposit overdrafts	665			676		638		678		680
Deferred net origination costs	237			215		188		151		146
Loans, gross	770,938			762,833		754,736		701,685		698,956
Less allowance for loan losses	3,129			2,958		2,879		2,837		3,121
Loans, net	$	767,809		759,875		751,857		698,848		695,835
Total assets	$	1,280,531		1,275,171		1,249,363		1,129,497		1,108,066
Total deposits	1,087,160			1,103,513		1,084,033		973,725		946,205
Short-term borrowings	37,387			14,931		12,731		13,454		16,645
Long-term debt	5,947			6,016		6,085		6,153		11,357
Total shareholders’ equity	140,108			140,851		137,698		128,576		125,695
Equity to assets ratio	10.94		%	11.05	%	11.02	%	11.38	%	11.34	%
Loans to deposit ratio	70.91		%	69.13	%	69.62	%	72.06	%	73.87	%

	Three Months Ended											Year Ended
	12/31/2015			9/30/2015		6/30/2015		3/31/2015		12/31/2014		12/31/2015		12/31/2014
Selected Balance Sheet Items, continued
Tangible common equity (TCE)	$	104,529		105,063		101,694		96,340		93,277
Tangible common assets (TCA)	1,244,952			1,239,383		1,213,359		1,097,261		1,075,648
TCE/TCA	8.40		%	8.48	%	8.38	%	8.78	%	8.67	%
Selected Average Balance Sheet Items
Investment securities and stock	$	406,423		385,353		360,750		313,279		311,395		366,758		327,704
Loans	$	764,440		760,159		737,021		699,959		694,185		740,626		679,223
Less allowance for loan losses	2,929			2,885		2,865		2,870		3,075		2,888		3,275
Net loans	$	761,511		757,274		734,156		697,089		691,110		737,738		675,948
Total assets	$	1,285,114		1,267,171		1,220,938		1,125,326		1,123,949		1,225,112		1,120,515
Total deposits	1,107,214			1,099,730		1,057,818		969,658		967,505		1,059,095		964,526
Short-term borrowings	20,290			13,450		12,803		13,824		12,217		15,105		14,820
Long-term debt	5,970			6,040		6,108		6,598		11,382		6,177		11,546
Total shareholders’ equity	141,751			139,032		136,003		127,608		125,302		136,145		122,716
Asset Quality
Net charge-offs	$	210		160		636		352		370
Other real estate owned	846			1,208		1,364		1,364		1,370
Non-accrual loans	1,722			2,254		1,961		3,972		5,599
Loans past due 90 days or more and still accruing	559			130		128		355		203
Total nonperforming loans	$	2,281		2,384		2,089		4,327		5,802
Net charge-offs to average loans	0.11		%	0.08	%	0.35	%	0.20	%	0.21	%
Allowance for loan losses to total loans	0.41		%	0.39	%	0.38	%	0.40	%	0.45	%
Nonperforming loans to total loans	0.30		%	0.31	%	0.28	%	0.62	%	0.83	%
Nonperforming assets to total assets	0.24		%	0.28	%	0.28	%	0.50	%	0.65	%
Assets Under Management
LCNB Corp. total assets	$	1,280,531		1,275,171		1,249,363		1,129,497		1,108,066
Trust and investments (fair value)	283,193			258,675		272,209		264,122		258,266
Mortgage loans serviced	111,837			113,610		117,204		116,534		120,433
Business cash management	7,271			6,809		6,628		5,839		5,811
Brokerage accounts (fair value)	148,956			142,151		144,186		141,439		132,823
Total assets managed	$	1,831,788		1,796,416		1,789,590		1,657,431		1,625,399
Non-GAAP Financial Measures
Accreted income on acquired loans	$	219		243		1,348		326		442		2,136		1,553
Amortization of acquired deposit premiums	$	34		46		211		186		191		477		801
Net income	$	2,884		2,633		3,123		2,834		3,217		11,474		9,869
Less (add) net gain (loss) on sales of securities, net of tax	108			0		146		73		37		327		98
Add merger-related expenses, net of tax	2			32		363		66		26		463		928
Core net income	$	2,778		2,665		3,340		2,827		3,206		11,610		10,699
Basic core earnings per share	$	0.28		0.27		0.34		0.30		0.34		1.20		1.15
Diluted core earnings per share	$	0.28		0.27		0.34		0.30		0.34		1.18		1.14
Adjusted return on average assets	0.86		%	0.83	%	1.10	%	1.01	%	1.13	%	0.95	%	0.95	%
Adjusted return on average equity	7.77		%	7.60	%	9.85	%	8.86	%	10.06	%	8.53	%	8.67	%
Core efficiency ratio (tax equivalent)	64.60		%	65.57	%	58.23	%	63.91	%	59.48	%	62.96	%	63.62	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	December 31, 2015 (Unaudited)			December 31, 2014
ASSETS:
Cash and due from banks	$	14,155		14,235
Interest-bearing demand deposits	832			1,610
Total cash and cash equivalents	14,987			15,845
Investment securities:
Available-for-sale, at fair value	377,978			285,365
Held-to-maturity, at cost	22,633			22,725
Federal Reserve Bank stock, at cost	2,732			2,346
Federal Home Loan Bank stock, at cost	3,638			3,638
Loans, net	767,809			695,835
Premises and equipment, net	22,100			20,733
Goodwill	30,183			27,638
Core deposit and other intangibles	5,396			4,780
Bank owned life insurance	22,561			21,936
Other assets	10,514			7,225
TOTAL ASSETS	$	1,280,531		1,108,066
LIABILITIES:
Deposits:
Noninterest-bearing	$	250,306		213,303
Interest-bearing	836,854			732,902
Total deposits	1,087,160			946,205
Short-term borrowings	37,387			16,645
Long-term debt	5,947			11,357
Accrued interest and other liabilities	9,929			8,164
TOTAL LIABILITIES	1,140,423			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 10,679,174 and 10,064,945 shares at December 31, 2015 and December 31, 2014, respectively	76,908			67,181
Retained earnings	74,629			69,394
Treasury shares at cost, 753,627 shares at December 31, 2015 and December 31, 2014	(11,665		)	(11,665	)
Accumulated other comprehensive loss, net of taxes	236			785
TOTAL SHAREHOLDERS' EQUITY	140,108			125,695
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,280,531		1,108,066

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,
	2015		2014	2015	2014
INTEREST INCOME:
Interest and fees on loans	$	8,713	8,698	35,285	32,706
Interest on investment securities –
Taxable	1,214		856	4,197	3,757
Non-taxable	761		694	2,848	2,713
Other short-term investments	124		119	329	301
TOTAL INTEREST INCOME	10,812		10,367	42,659	39,477
INTEREST EXPENSE:
Interest on deposits	822		738	3,009	3,161
Interest on short-term borrowings	11		4	24	22
Interest on long-term debt	73		102	295	407
TOTAL INTEREST EXPENSE	906		844	3,328	3,590
NET INTEREST INCOME	9,906		9,523	39,331	35,887
PROVISION FOR LOAN LOSSES	380		193	1,366	930
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,526		9,330	37,965	34,957
NON-INTEREST INCOME:
Trust income	856		832	3,262	2,903
Service charges and fees on deposit accounts	1,265		1,219	4,920	4,838
Net gain (loss) on sales of securities	163		56	495	149
Bank owned life insurance income	155		164	625	671
Gains from sales of mortgage loans	55		55	343	147
Other operating income	106		123	478	434
TOTAL NON-INTEREST INCOME	2,600		2,449	10,123	9,142
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,582		3,866	17,593	15,762
Equipment expenses	343		340	1,257	1,316
Occupancy expense, net	558		526	2,307	2,232
State franchise tax	248		241	1,001	955
Marketing	161		162	720	703
Amortization of intangibles	190		150	700	574
FDIC insurance premiums	166		168	598	660
Merger-related expenses	2		34	643	1,400
Other non-interest expense	1,979		1,847	7,573	7,242
TOTAL NON-INTEREST EXPENSE	8,229		7,334	32,392	30,844
INCOME BEFORE INCOME TAXES	3,897		4,445	15,696	13,255
PROVISION FOR INCOME TAXES	1,013		1,228	4,222	3,386
NET INCOME	$	2,884	3,217	11,474	9,869
Dividends declared per common share	$	0.16	0.16	0.64	0.64
Earnings per common share:
Basic	$	0.29	0.34	1.18	1.06
Diluted	0.29		0.34	1.17	1.05
Weighted average common shares outstanding:
Basic	9,905,612		9,306,382	9,704,965	9,297,019
Diluted	10,014,908		9,403,013	9,811,476	9,406,346