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
	12/31/2018			9/30/2018		6/30/2018		3/31/2018		12/31/2017		12/31/2018		12/31/2017
Condensed Income Statement
Interest income	$	15,844		15,070		12,538		11,142		11,610		54,594		44,463
Interest expense	2,334			1,967		1,170		954		953		6,425		3,599
Net interest income	13,510			13,103		11,368		10,188		10,657		48,169		40,864
Provision for loan losses	(39		)	659		224		79		(10	)	923		215
Net interest income after provision	13,549			12,444		11,144		10,109		10,667		47,246		40,649
Non-interest income	2,702			2,921		2,791		2,636		2,579		11,050		10,458
Non-interest expense	9,925			10,317		10,711		9,549		8,612		40,502		33,863
Income before income taxes	6,326			5,048		3,224		3,196		4,634		17,794		17,244
Provision for income taxes	1,133			847		486		483		1,017		2,949		4,272
Net income	$	5,193		4,201		2,738		2,713		3,617		14,845		12,972
Amort/Accret income on acquired loans	$	229		198		44		96		606		567		1,096
Amort/Accret expenses on acquired interest-bearing liabilities	$	149		214		—		—		—		363		—
Tax-equivalent net interest income	$	13,680		13,279		11,549		10,375		11,062		48,883		42,549
Per Share Data
Dividends per share	$	0.17		0.16		0.16		0.16		0.16		0.65		0.64
Basic earnings per common share	$	0.40		0.32		0.25		0.27		0.37		1.24		1.30
Diluted earnings per common share	$	0.40		0.32		0.25		0.27		0.36		1.24		1.29
Book value per share	$	16.47		16.05		15.97		14.80		14.99		16.47		14.99
Tangible book value per share	$	11.67		11.23		11.14		11.47		11.64		11.67		11.64
Weighted average common shares outstanding:
Basic	13,285,386			13,285,203		11,099,485		10,020,611		10,013,777		11,935,350		10,005,575
Diluted	13,290,499			13,290,665		11,105,014		10,028,588		10,020,566		11,942,253		10,012,511
Shares outstanding at period end	13,295,276			13,304,976		13,299,235		10,041,152		10,023,059		13,295,276		10,023,059
Selected Financial Ratios
Return on average assets	1.27		%	1.03	%	0.78	%	0.85	%	1.11	%	1.00	%	0.99	%
Return on average equity	9.55		%	7.76	%	6.46	%	7.33	%	9.49	%	7.90	%	8.74	%
Dividend payout ratio	42.50		%	50.00	%	64.00	%	59.26	%	43.24	%	52.42	%	49.23	%
Net interest margin (tax equivalent)	3.69		%	3.59	%	3.63	%	3.59	%	3.73	%	3.63	%	3.58	%
Efficiency ratio (tax equivalent)	60.58		%	63.69	%	74.69	%	73.39	%	63.13	%	67.58	%	63.88	%
Selected Balance Sheet Items
Cash and cash equivalents	$	20,040		19,812		24,901		17,494		25,386
Debt and equity securities	282,813			299,786		311,047		310,009		317,413
Loans:
Commercial and industrial	$	77,740		78,002		81,778		37,118		36,057
Commercial, secured by real estate	740,647			704,987		705,978		542,890		527,947
Residential real estate	349,127			347,920		339,435		246,487		251,582
Consumer	17,283			17,505		17,705		17,176		17,450
Agricultural	13,297			13,280		13,390		12,217		15,194
Other, including deposit overdrafts	450			498		583		506		539
Deferred net origination costs	79			133		229		263		291
Loans, gross	1,198,623			1,162,325		1,159,098		856,657		849,060
Less allowance for loan losses	4,046			4,016		3,603		3,529		3,403
Loans, net	$	1,194,577		1,158,309		1,155,495		853,128		845,657
Total earning assets	$	1,483,166		1,465,787		1,471,923		1,168,204		1,170,700
Total assets	1,636,927			1,620,299		1,631,442		1,288,791		1,295,638
Total deposits	1,300,919			1,371,023		1,380,884		1,123,463		1,085,821

	Three Months Ended											Year Ended
	12/31/2018			9/30/2018		6/30/2018		3/31/2018		12/31/2017		12/31/2018		12/31/2017
Selected Balance Sheet Items, continued
Short-term borrowings	56,230			0		0		0		47,000
Long-term debt	47,032			23,079		27,085		6,219		303
Total shareholders’ equity	218,985			213,515		212,366		148,584		150,271
Equity to assets ratio	13.38		%	13.18	%	13.02	%	11.53	%	11.60	%
Loans to deposits ratio	92.14		%	84.78	%	83.94	%	76.25	%	78.20	%
Tangible common equity (TCE)	$	155,197		149,398		147,705		114,801		116,289
Tangible common assets (TCA)	1,573,139			1,556,182		1,566,781		1,255,008		1,261,656
TCE/TCA	9.87		%	9.60	%	9.43	%	9.15	%	9.22	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	20,685		25,920		27,319		21,820		18,787		23,910		25,132
Debt and equity securities	291,433			304,112		306,366		313,689		332,225		303,839		358,682
Loans	$	1,177,061		1,155,846		961,726		853,152		840,526		1,038,159		822,452
Less allowance for loan losses	4,016			3,622		4,245		3,401		3,407		3,822		3,405
Net loans	$	1,173,045		1,152,224		957,481		849,751		837,119		1,034,337		819,047
Total earning assets	$	1,471,650		1,465,510		1,276,176		1,170,708		1,175,180		1,347,162		1,189,106
Total assets	1,626,029			1,623,016		1,409,698		1,292,375		1,295,293		1,488,941		1,309,501
Total deposits	1,333,673			1,367,950		1,212,104		1,114,979		1,096,966		1,258,075		1,125,866
Short-term borrowings	36,348			1,833		3,491		14,086		34,440		13,967		23,976
Long-term debt	25,536			25,757		13,252		2,255		323		16,789		421
Total shareholders’ equity	215,739			214,769		170,077		150,058		151,154		187,915		148,443
Equity to assets ratio	13.27		%	13.23	%	12.06	%	11.61	%	11.67	%	12.62	%	11.34	%
Loans to deposits ratio	88.26		%	84.49	%	79.34	%	76.52	%	76.62	%	82.52	%	73.05	%
Asset Quality
Net charge-offs (recoveries)	$	(68	)	245		150		(47	)	(7	)	280		387
Other real estate owned	244			35		35		—		—		244		—
Non-accrual loans	2,956			2,603		4,065		2,744		2,965		2,956		2,965
Loans past due 90 days or more and still accruing	149			1		5		146		0		149		0
Total nonperforming loans	$	3,105		2,604		4,070		2,890		2,965		3,105		2,965
Net charge-offs (recoveries) to average loans	(0.02		)%	0.08	%	0.06	%	(0.02	)%	0.00	%	0.03	%	0.05	%
Allowance for loan losses to total loans	0.34		%	0.35	%	0.31	%	0.41	%	0.40	%	0.34	%	0.40	%
Nonperforming loans to total loans	0.26		%	0.22	%	0.35	%	0.34	%	0.35	%	0.26	%	0.35	%
Nonperforming assets to total assets	0.20		%	0.16	%	0.25	%	0.22	%	0.23	%	0.20	%	0.23	%
Assets Under Management
LCNB Corp. total assets	$	1,636,927		1,620,299		1,631,442		1,288,791		1,295,638
Trust and investments (fair value)	337,549			386,582		370,587		359,766		362,486
Mortgage loans serviced	97,685			115,647		114,536		90,630		92,818
Cash management	48,906			36,502		48,369		72,372		84,344
Brokerage accounts (fair value)	233,751			247,175		238,651		230,168		229,006
Total assets managed	$	2,354,818		2,406,205		2,403,585		2,041,727		2,064,292
Non-GAAP Financial Measures
Net income	$	5,193		4,201		2,738		2,713		3,617		14,845		12,972
Add: merger-related expenses, net of tax	148			274		710		621		87		1,753		87
Adjusted net income	$	5,341		4,475		3,448		3,334		3,704		16,598		13,059
Basic adjusted earnings per share	0.41			0.34		0.31		0.33		0.37		1.39		1.31
Diluted adjusted earnings per share	0.41			0.34		0.31		0.33		0.37		1.39		1.30
Adjusted return on average assets	1.30		%	1.09	%	0.98	%	1.05	%	1.16	%	1.11	%	1.00	%
Adjusted return on average equity	9.82		%	8.27	%	8.13	%	9.01	%	9.94	%	8.83	%	8.80	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	December 31, 2018 (Unaudited)			December 31, 2017
ASSETS:
Cash and due from banks	$	18,310		21,159
Interest-bearing demand deposits	1,730			4,227
Total cash and cash equivalents	20,040			25,386
Interest-bearing time deposits	996			—
Investment securities:
Equity securities with a readily determinable fair value, at fair value	2,078			2,160
Equity securities without a readily determinable fair value, at cost	2,099			1,099
Debt securities, available-for-sale, at fair value	238,421			275,213
Debt securities, held-to-maturity, at cost	29,721			32,571
Federal Reserve Bank stock, at cost	4,653			2,732
Federal Home Loan Bank stock, at cost	4,845			3,638
Loans, net	1,194,577			845,657
Premises and equipment, net	32,627			34,927
Goodwill	59,221			30,183
Core deposit and other intangibles	5,042			3,799
Bank owned life insurance	28,723			27,985
Other assets	13,884			10,288
TOTAL ASSETS	$	1,636,927		1,295,638
LIABILITIES:
Deposits:
Noninterest-bearing	$	322,571		283,212
Interest-bearing	978,348			802,609
Total deposits	1,300,919			1,085,821
Short-term borrowings	56,230			47,000
Long-term debt	47,032			303
Accrued interest and other liabilities	13,761			12,243
TOTAL LIABILITIES	1,417,942			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 December 31, 2018 and 2017; issued 14,070,303 and 10,776,686 shares at December 31, 2018 and 2017, respectively	141,170			76,977
Retained earnings	94,547			87,301
Treasury shares at cost, 775,027 and 753,627 shares at December 31, 2018 and 2017, respectively	(12,013		)	(11,665	)
Accumulated other comprehensive loss, net of taxes	(4,719		)	(2,342	)
TOTAL SHAREHOLDERS' EQUITY	218,985			150,271
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,636,927		1,295,638

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,
	2018			2017		2018		2017
INTEREST INCOME:
Interest and fees on loans	$	14,010		9,738		47,489		36,571
Dividends on equity securities with a readily determinable fair value	17			19		65		63
Dividends on equity securities without a readily determinable fair value	17			9		39		26
Interest on debt securities, taxable	900			950		3,666		4,239
Interest on debt securities, non-taxable	641			753		2,686		3,130
Other short-term investments	259			141		649		434
TOTAL INTEREST INCOME	15,844			11,610		54,594		44,463
INTEREST EXPENSE:
Interest on deposits	1,976			839		5,753		3,378
Interest on short-term borrowings	223			112		311		209
Interest on long-term debt	135			2		361		12
TOTAL INTEREST EXPENSE	2,334			953		6,425		3,599
NET INTEREST INCOME	13,510			10,657		48,169		40,864
PROVISION FOR LOAN LOSSES	(39		)	(10	)	923		215
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	13,549			10,667		47,246		40,649
NON-INTEREST INCOME:
Fiduciary income	971			869		3,958		3,473
Service charges and fees on deposit accounts	1,420			1,350		5,590		5,236
Net gains (losses) on sales of securities	—			15		(8	)	233
Bank owned life insurance income	185			191		738		867
Gains from sales of loans	41			30		223		166
Other operating income	85			124		549		483
TOTAL NON-INTEREST INCOME	2,702			2,579		11,050		10,458
NON-INTEREST EXPENSE:
Salaries and employee benefits	5,488			4,678		21,279		18,585
Equipment expenses	341			336		1,138		1,172
Occupancy expense, net	742			724		2,861		2,613
State financial institutions tax	299			286		1,197		1,137
Marketing	321			232		1,119		873
Amortization of intangibles	263			189		922		751
FDIC insurance premiums	130			103		419		423
Contracted services	454			325		1,547		1,255
Other real estate owned	16			2		20		10
Merger-related expenses	164			108		2,123		118
Other non-interest expense	1,707			1,629		7,877		6,926
TOTAL NON-INTEREST EXPENSE	9,925			8,612		40,502		33,863
INCOME BEFORE INCOME TAXES	6,326			4,634		17,794		17,244
PROVISION FOR INCOME TAXES	1,133			1,017		2,949		4,272
NET INCOME	$	5,193		3,617		14,845		12,972
Dividends declared per common share	$	0.17		0.16		0.65		0.64
Earnings per common share:
Basic	0.40			0.37		1.24		1.30
Diluted	0.40			0.36		1.24		1.29
Weighted average common shares outstanding:
Basic	13,285,386			10,013,777		11,935,350		10,005,575
Diluted	13,290,499			10,020,566		11,942,253		10,012,511

Contacts

LCNB Corp.

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

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