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
	3/31/2018			12/31/2017		9/30/2017		6/30/2017		3/31/2017
Condensed Income Statement
Interest income	$	11,142		11,610		11,055		10,934		10,864
Interest expense	954			953		908		861		877
Net interest income	10,188			10,657		10,147		10,073		9,987
Provision for loan losses	79			(10	)	(12	)	222		15
Net interest income after provision	10,109			10,667		10,159		9,851		9,972
Non-interest income	2,636			2,579		2,659		2,790		2,430
Non-interest expense	9,549			8,612		8,672		8,611		7,968
Income before income taxes	3,196			4,634		4,146		4,030		4,434
Provision for income taxes	483			1,017		1,040		1,027		1,188
Net income	$	2,713		3,617		3,106		3,003		3,246
Accreted income on acquired loans	$	96		606		90		180		220
Tax-equivalent net interest income	$	10,375		11,062		10,569		10,494		10,410
Per Share Data
Dividends per share	$	0.16		0.16		0.16		0.16		0.16
Basic earnings per common share	$	0.27		0.37		0.31		0.30		0.32
Diluted earnings per common share	$	0.27		0.36		0.31		0.30		0.32
Book value per share	$	14.80		14.99		14.94		14.77		14.52
Tangible book value per share	$	11.47		11.64		11.57		11.38		11.11
Average basic common shares outstanding	10,020,611			10,013,777		10,008,807		10,004,422		9,995,054
Average diluted common shares outstanding	10,028,588			10,020,566		10,015,204		10,011,312		10,002,878
Shares outstanding at period end	10,041,152			10,023,059		10,018,507		10,014,004		10,009,642
Selected Financial Ratios
Return on average assets	0.85		%	1.11	%	0.94	%	0.91	%	1.01	%
Return on average equity	7.33		%	9.49	%	8.22	%	8.15	%	9.10	%
Dividend payout ratio	59.26		%	43.24	%	51.61	%	53.33	%	50.00	%
Net interest margin (tax equivalent)	3.59		%	3.73	%	3.52	%	3.50	%	3.55	%
Efficiency ratio (tax equivalent)	73.39		%	63.13	%	65.56	%	64.82	%	62.06	%
Selected Balance Sheet Items
Cash and cash equivalents	$	17,494		25,386		21,203		29,967		33,274
Investment securities and stock	310,009			317,413		353,634		373,595		371,501
Loans:
Commercial and industrial	$	37,118		36,057		36,049		38,651		40,039
Commercial, secured by real estate	542,890			527,947		510,158		495,255		475,594
Residential real estate	246,487			251,582		253,530		258,710		260,853
Consumer	17,176			17,450		17,956		17,475		17,646
Agricultural	12,217			15,194		15,677		16,014		15,459
Other, including deposit overdrafts	506			539		570		547		609
Deferred net origination costs	263			291		264		281		281
Loans, gross	856,657			849,060		834,204		826,933		810,481
Less allowance for loan losses	3,529			3,403		3,407		3,382		3,328
Loans, net	$	853,128		845,657		830,797		823,551		807,153
Total earning assets	$	1,168,204		1,170,700		1,193,648		1,211,096		1,200,544
Total assets	1,288,791			1,295,638		1,314,319		1,335,571		1,319,074
Total deposits	1,123,463			1,085,821		1,121,523		1,143,920		1,148,198
Short-term borrowings	0			47,000		30,000		31,712		15,957

	Three Months Ended
	3/31/2018			12/31/2017		9/30/2017		6/30/2017		3/31/2017
Selected Balance Sheet Items, continued
Long-term debt	6,219			303		363		402		480
Total shareholders’ equity	148,584			150,271		149,713		147,927		145,318
Equity to assets ratio	11.53		%	11.60	%	11.39	%	11.08	%	11.02	%
Loans to deposits ratio	76.25		%	78.20	%	74.38	%	72.29	%	70.59	%
Tangible common equity (TCE)	$	114,801		116,289		115,527		113,542		110,745
Tangible common assets (TCA)	1,255,008			1,261,656		1,280,133		1,301,186		1,284,501
TCE/TCA	9.15		%	9.22	%	9.02	%	8.73	%	8.62	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	21,820		18,787		21,609		33,639		26,672
Investment securities and stock	313,689			332,225		363,039		373,295		366,499
Loans	$	853,152		840,526		824,183		811,186		813,597
Less allowance for loan losses	3,401			3,407		3,324		3,334		3,557
Net loans	$	849,751		837,119		820,859		807,852		810,040
Total earning assets	$	1,170,708		1,175,180		1,190,860		1,202,129		1,188,383
Total assets	1,292,375			1,295,293		1,313,476		1,321,442		1,308,591
Total deposits	1,114,979			1,096,966		1,133,072		1,148,206		1,125,457
Short-term borrowings	14,086			34,440		17,936		15,030		28,500
Long-term debt	2,255			323		383		441		537
Total shareholders’ equity	150,058			151,154		150,032		147,826		144,672
Equity to assets ratio	11.61		%	11.67	%	11.42	%	11.19	%	11.06	%
Loans to deposits ratio	76.52		%	76.62	%	72.74	%	70.65	%	72.29	%
Asset Quality
Net charge-offs (recoveries)	$	(47	)	(7	)	(36	)	168		262
Other real estate owned	0			0		0		0		0
Non-accrual loans	2,744			2,965		4,387		3,747		3,869
Loans past due 90 days or more and still accruing	146			0		95		141		12
Total nonperforming loans	$	2,890		2,965		4,482		3,888		3,881
Net charge-offs (recoveries) to average loans	(0.02		)%	0.00	%	(0.02	)%	0.08	%	0.13	%
Allowance for loan losses to total loans	0.41		%	0.40	%	0.41	%	0.41	%	0.41	%
Nonperforming loans to total loans	0.34		%	0.35	%	0.54	%	0.47	%	0.48	%
Nonperforming assets to total assets	0.22		%	0.23	%	0.34	%	0.29	%	0.29	%
Assets Under Management
LCNB Corp. total assets	$	1,288,791		1,295,638		1,314,319		1,335,571		1,319,074
Trust and investments (fair value)	359,766			362,486		326,642		315,450		316,856
Mortgage loans serviced	90,630			92,818		96,241		98,234		99,324
Cash management	72,372			84,344		77,780		45,519		29,102
Brokerage accounts (fair value)	230,168			229,006		219,960		209,019		199,019
Total assets managed	$	2,041,727		2,064,292		2,034,942		2,003,793		1,963,375
Non-GAAP Financial Measures
Net income	$	2,713		3,617		3,106		3,003		3,246
Add: merger-related expenses, net of tax	621			87		0		0		0
Core net income	$	3,334		3,704		3,106		3,003		3,246
Basic core earnings per share	0.33			0.37		0.31		0.30		0.32
Diluted core earnings per share	0.33			0.37		0.31		0.30		0.32
Adjusted return on average assets	1.05		%	1.16	%	0.94	%	0.91	%	1.01	%
Adjusted return on average equity	9.01		%	9.94	%	8.22	%	8.15	%	9.1	%
Core efficiency ratio (tax equivalent)	66.67		%	62.34	%	65.56	%	64.82	%	62.06	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	March 31, 2018 (Unaudited)			December 31, 2017
ASSETS:
Cash and due from banks	$	12,713		21,159
Interest-bearing demand deposits	4,781			4,227
Total cash and cash equivalents	17,494			25,386
Investment securities:
Equity securities with a readily determinable fair value, at fair value	2,144			2,161
Equity securities without a readily determinable fair value, at cost	1,099			1,099
Debt securities, available-for-sale, at fair value	267,894			275,212
Debt securities, held-to-maturity, at cost	32,502			32,571
Federal Reserve Bank stock, at cost	2,732			2,732
Federal Home Loan Bank stock, at cost	3,638			3,638
Loans, net	853,128			845,657
Premises and equipment, net	34,595			34,927
Goodwill	30,183			30,183
Core deposit and other intangibles	3,600			3,799
Bank owned life insurance	28,171			27,985
Other assets	11,611			10,288
TOTAL ASSETS	$	1,288,791		1,295,638
LIABILITIES:
Deposits:
Noninterest-bearing	$	286,186		283,212
Interest-bearing	837,277			802,609
Total deposits	1,123,463			1,085,821
Short-term borrowings	—			47,000
Long-term debt	6,219			303
Accrued interest and other liabilities	10,525			12,243
TOTAL LIABILITIES	1,140,207			1,145,367
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 March 31, 2018 and December 31, 2017; issued 10,794,779 and 10,776,686 shares at March 31, 2018 and December 31, 2017, respectively	77,159			76,977
Retained earnings	88,933			87,301
Treasury shares at cost, 753,627 shares at March 31, 2018 and December 31, 2017	(11,665		)	(11,665	)
Accumulated other comprehensive loss, net of taxes	(5,843		)	(2,342	)
TOTAL SHAREHOLDERS' EQUITY	148,584			150,271
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,288,791		1,295,638

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended  March 31,
	2018	2017
INTEREST INCOME:
Interest and fees on loans	9,413	8,915
Dividends on equity securities with a readily determinable fair value	15	15
Dividends on equity securities without a readily determinable fair value	7	6
Interest on debt securities, taxable	931	1,072
Interest on debt securities, non-taxable	704	799
Other short-term investments	72	57
TOTAL INTEREST INCOME	11,142	10,864
INTEREST EXPENSE:
Interest on deposits	871	843
Interest on short-term borrowings	69	30
Interest on long-term debt	14	4
TOTAL INTEREST EXPENSE	954	877
NET INTEREST INCOME	10,188	9,987
PROVISION FOR LOAN LOSSES	79	15
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	10,109	9,972
NON-INTEREST INCOME:
Fiduciary income	964	852
Service charges and fees on deposit accounts	1,305	1,222
Net gain on sales of securities	—	—
Bank owned life insurance income	186	189
Gains from sales of loans	22	39
Other operating income	159	128
TOTAL NON-INTEREST INCOME	2,636	2,430
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,977	4,526
Equipment expenses	253	211
Occupancy expense, net	727	568
State financial institutions tax	303	284
Marketing	132	143
Amortization of intangibles	185	185
FDIC insurance premiums	99	104
Contracted services	315	248
Other real estate owned	2	5
Merger-related expenses	758	—
Other non-interest expense	1,798	1,694
TOTAL NON-INTEREST EXPENSE	9,549	7,968
INCOME BEFORE INCOME TAXES	3,196	4,434
PROVISION FOR INCOME TAXES	483	1,188
NET INCOME	2,713	3,246
Dividends declared per common share	0.16	0.16
Earnings per common share:
Basic	0.27	0.32
Diluted	0.27	0.32
Weighted average common shares outstanding:
Basic	10,020,611	9,995,054
Diluted	10,028,588	10,002,878

Contacts

LCNB Corp.

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

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