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
	12/31/2017			9/30/2017		6/30/2017		3/31/2017		12/31/2016		12/31/2017		12/31/2016
Condensed Income Statement
Interest income	$	11,610		11,055		10,934		10,864		11,226		44,463		43,750
Interest expense	953			908		861		877		887		3,599		3,504
Net interest income	10,657			10,147		10,073		9,987		10,339		40,864		40,246
Provision for loan losses	(10		)	(12	)	222		15		55		215		913
Net interest income after provision	10,667			10,159		9,851		9,972		10,284		40,649		39,333
Non-interest income	2,579			2,659		2,790		2,430		2,615		10,458		10,853
Non-interest expense	8,612			8,672		8,611		7,968		7,908		33,863		33,261
Income before income taxes	4,634			4,146		4,030		4,434		4,991		17,244		16,925
Provision for income taxes	1,017			1,040		1,027		1,188		1,337		4,272		4,443
Net income	$	3,617		3,106		3,003		3,246		3,654		12,972		12,482
Accreted income on acquired loans	$	606		90		180		220		495		1,096		1,365
Tax-equivalent net interest income	$	11,062		10,569		10,494		10,410		10,772		42,549		41,908
Per Share Data
Dividends per share	$	0.16		0.16		0.16		0.16		0.16		0.64		0.64
Basic earnings per common share	$	0.37		0.31		0.30		0.32		0.37		1.30		1.26
Diluted earnings per common share	$	0.36		0.31		0.30		0.32		0.37		1.29		1.25
Book value per share	$	14.99		14.94		14.77		14.52		14.30		14.99		14.30
Tangible book value per share	$	11.64		11.57		11.38		11.11		10.86		11.64		10.86
Average basic common shares outstanding	10,013,777			10,008,807		10,004,422		9,995,054		9,985,936		10,005,575		9,948,057
Average diluted common shares outstanding	10,020,566			10,015,204		10,011,312		10,002,878		9,991,975		10,012,511		9,976,370
Shares outstanding at period end	10,023,059			10,018,507		10,014,004		10,009,642		9,998,025		10,023,059		9,998,025
Selected Financial Ratios
Return on average assets	1.11		%	0.94	%	0.91	%	1.01	%	1.10	%	0.99	%	0.96	%
Return on average equity	9.49		%	8.22	%	8.15	%	9.10	%	9.91	%	8.74	%	8.60	%
Dividend payout ratio	43.24		%	51.61	%	53.33	%	50.00	%	43.24	%	49.23	%	50.79	%
Net interest margin (tax equivalent)	3.73		%	3.52	%	3.50	%	3.55	%	3.56	%	3.58	%	3.51	%
Efficiency ratio (tax equivalent)	63.13		%	65.56	%	64.82	%	62.06	%	59.07	%	63.88	%	63.04	%
Selected Balance Sheet Items
Cash and cash equivalents	$	25,386		21,203		29,967		33,274		18,865
Investment securities and stock	317,413			353,634		373,595		371,501		368,032
Loans:
Commercial and industrial	$	36,057		36,049		38,651		40,039		41,878
Commercial, secured by real estate	527,947			510,158		495,255		475,594		477,275
Residential real estate	251,582			253,530		258,710		260,853		265,788
Consumer	17,450			17,956		17,475		17,646		19,173
Agricultural	15,194			15,677		16,014		15,459		14,802
Other, including deposit overdrafts	539			570		547		609		633
Deferred net origination costs	291			264		281		281		254
Loans, gross	849,060			834,204		826,933		810,481		819,803
Less allowance for loan losses	3,403			3,407		3,382		3,328		3,575
Loans, net	$	845,657		830,797		823,551		807,153		816,228

	Three Months Ended											Year Ended
	12/31/2017			9/30/2017		6/30/2017		3/31/2017		12/31/2016		12/31/2017		12/31/2016
Selected Balance Sheet Items, continued
Total earning assets	$	1,170,700		1,193,648		1,211,096		1,200,544		1,188,322
Total assets	1,295,638			1,314,319		1,335,571		1,319,074		1,306,799
Total deposits	1,085,821			1,121,523		1,143,920		1,148,198		1,110,905
Short-term borrowings	47,000			30,000		31,712		15,957		42,040
Long-term debt	303			363		402		480		598
Total shareholders’ equity	150,271			149,713		147,927		145,318		142,944
Equity to assets ratio	11.60		%	11.39	%	11.08	%	11.02	%	10.94	%
Loans to deposits ratio	78.20		%	74.38	%	72.29	%	70.59	%	73.80	%
Tangible common equity (TCE)	$	116,289		115,527		113,542		110,745		108,178
Tangible common assets (TCA)	1,261,656			1,280,133		1,301,186		1,284,501		1,272,033
TCE/TCA	9.22		%	9.02	%	8.73	%	8.62	%	8.50	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	18,787		21,609		33,639		26,672		28,422		25,132		29,346
Investment securities and stock	332,225			363,039		373,295		366,499		380,138		358,682		390,621
Loans	$	840,526		824,183		811,186		813,597		812,537		822,452		792,526
Less allowance for loan losses	3,407			3,324		3,334		3,557		3,654		3,405		3,318
Net loans	$	837,119		820,859		807,852		810,040		808,883		819,047		789,208
Total earning assets	$	1,175,180		1,190,860		1,202,129		1,188,383		1,204,360		1,189,106		1,195,541
Total assets	1,295,293			1,313,476		1,321,442		1,308,591		1,316,037		1,309,501		1,305,132
Total deposits	1,096,966			1,133,072		1,148,206		1,125,457		1,138,740		1,125,866		1,131,179
Short-term borrowings	34,440			17,936		15,030		28,500		20,406		23,976		17,952
Long-term debt	323			383		441		537		620		421		826
Total shareholders’ equity	151,154			150,032		147,826		144,672		146,602		148,443		145,161
Equity to assets ratio	11.67		%	11.42	%	11.19	%	11.06	%	11.14	%	11.34	%	11.12	%
Loans to deposits ratio	76.62		%	72.74	%	70.65	%	72.29	%	71.35	%	73.05	%	70.06	%
Asset Quality
Net charge-offs (recoveries)	$	(7	)	(36	)	168		262		278		387		467
Other real estate owned	0			0		0		0		0		0		0
Non-accrual loans	2,965			4,387		3,747		3,869		5,725		2,965		5,725
Loans past due 90 days or more and still accruing	0			95		141		12		23		0		23
Total nonperforming loans	$	2,965		4,482		3,888		3,881		5,748		2,965		5,748
Net charge-offs (recoveries) to average loans	0.00		%	(0.02	)%	0.08	%	0.13	%	0.14	%	0.09	%	0.12	%
Allowance for loan losses to total loans	0.40		%	0.41	%	0.41	%	0.41	%	0.44	%	0.40	%	0.44	%
Nonperforming loans to total loans	0.35		%	0.54	%	0.47	%	0.48	%	0.70	%	0.35	%	0.70	%
Nonperforming assets to total assets	0.23		%	0.34	%	0.29	%	0.29	%	0.44	%	0.23	%	0.44	%
Assets Under Management
LCNB Corp. total assets	$	1,295,638		1,314,319		1,335,571		1,319,074		1,306,799
Trust and investments (fair value)	362,486			326,642		315,450		316,856		303,534
Mortgage loans serviced	92,818			96,241		98,234		99,324		100,982
Cash management	84,344			77,780		45,519		29,102		30,319
Brokerage accounts (fair value)	229,006			219,960		209,019		199,019		188,663
Total assets managed	$	2,064,292		2,034,942		2,003,793		1,963,375		1,930,297

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	December 31, 2017 (Unaudited)			December 31, 2016
ASSETS:
Cash and due from banks	$	21,159		18,378
Interest-bearing demand deposits	4,227			487
Total cash and cash equivalents	25,386			18,865
Investment securities:
Available-for-sale, at fair value	278,472			320,659
Held-to-maturity, at cost	32,571			41,003
Federal Reserve Bank stock, at cost	2,732			2,732
Federal Home Loan Bank stock, at cost	3,638			3,638
Loans, net	845,657			816,228
Premises and equipment, net	34,927			30,244
Goodwill	30,183			30,183
Core deposit and other intangibles	3,799			4,582
Bank owned life insurance	27,985			27,307
Other assets	10,288			11,358
TOTAL ASSETS	$	1,295,638		1,306,799
LIABILITIES:
Deposits:
Noninterest-bearing	$	283,212		271,332
Interest-bearing	802,609			839,573
Total deposits	1,085,821			1,110,905
Short-term borrowings	47,000			42,040
Long-term debt	303			598
Accrued interest and other liabilities	12,243			10,312
TOTAL LIABILITIES	1,145,367			1,163,855
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 at December 31, 2017 and 2016; issued 10,776,686 and 10,751,652 shares at December 31, 2017 and 2016, respectively	76,977			76,490
Retained earnings	87,301			80,736
Treasury shares at cost, 753,627 shares at December 31, 2017 and 2016	(11,665		)	(11,665	)
Accumulated other comprehensive loss, net of taxes	(2,342		)	(2,617	)
TOTAL SHAREHOLDERS' EQUITY	150,271			142,944
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,295,638		1,306,799

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended   December 31,				Year Ended  December 31,
	2017			2016	2017	2016
INTEREST INCOME:
Interest and fees on loans	$	9,738		9,205	36,571	35,600
Interest on investment securities –
Taxable	978			1,054	4,328	4,582
Non-taxable	753			834	3,130	3,199
Other short-term investments	141			133	434	369
TOTAL INTEREST INCOME	11,610			11,226	44,463	43,750
INTEREST EXPENSE:
Interest on deposits	839			875	3,378	3,440
Interest on short-term borrowings	112			8	209	38
Interest on long-term debt	2			4	12	26
TOTAL INTEREST EXPENSE	953			887	3,599	3,504
NET INTEREST INCOME	10,657			10,339	40,864	40,246
PROVISION FOR LOAN LOSSES	(10		)	55	215	913
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	10,667			10,284	40,649	39,333
NON-INTEREST INCOME:
Fiduciary income	869			815	3,473	3,286
Service charges and fees on deposit accounts	1,350			1,296	5,236	5,008
Net gain on sales of securities	15			125	233	1,082
Bank owned life insurance income	191			193	867	746
Gains from sales of loans	30			69	166	244
Other operating income	124			117	483	487
TOTAL NON-INTEREST INCOME	2,579			2,615	10,458	10,853
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,678			4,478	18,585	18,215
Equipment expenses	336			281	1,172	1,048
Occupancy expense, net	724			564	2,613	2,271
State financial institutions tax	286			278	1,137	1,114
Marketing	232			166	873	696
Amortization of intangibles	189			189	751	753
FDIC insurance premiums	103			52	423	547
Contracted services	325			283	1,255	1,033
Other real estate owned	2			17	10	624
Merger-related expenses	108			—	118	—
Other non-interest expense	1,629			1,600	6,926	6,960
TOTAL NON-INTEREST EXPENSE	8,612			7,908	33,863	33,261
INCOME BEFORE INCOME TAXES	4,634			4,991	17,244	16,925
PROVISION FOR INCOME TAXES	1,017			1,337	4,272	4,443
NET INCOME	$	3,617		3,654	12,972	12,482
Dividends declared per common share	$	0.16		0.16	0.64	0.64
Earnings per common share:
Basic	0.37			0.37	1.30	1.26
Diluted	0.36			0.37	1.29	1.25
Weighted average common shares outstanding:
Basic	10,013,777			9,985,936	10,005,575	9,948,057
Diluted	10,020,566			9,991,975	10,012,511	9,976,370

Contacts

LCNB Corp.

Steve P. Foster, CEO & President, 800-344-BANK

Robert C. Haines II, Executive Vice President and CFO, 800-344-BANK