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
	3/31/2019			12/31/2018		9/30/2018		6/30/2018		3/31/2018
Condensed Income Statement
Interest income	$	16,113		15,844		15,070		12,538		11,142
Interest expense	2,722			2,334		1,967		1,170		954
Net interest income	13,391			13,510		13,103		11,368		10,188
Provision for loan losses	(105		)	(39	)	659		224		79
Net interest income after provision	13,496			13,549		12,444		11,144		10,109
Non-interest income	2,772			2,702		2,921		2,791		2,636
Non-interest expense	10,700			9,925		10,317		10,711		9,549
Income before income taxes	5,568			6,326		5,048		3,224		3,196
Provision for income taxes	941			1,133		847		486		483
Net income	$	4,627		5,193		4,201		2,738		2,713
Amort/Accret income on acquired loans	$	224		229		198		44		96
Amort/Accret expenses on acquired interest-bearing liabilities	$	144		149		214		—		—
Tax-equivalent net interest income	$	13,536		13,680		13,279		11,549		10,375
Per Share Data
Dividends per share	$	0.17		0.17		0.16		0.16		0.16
Basic earnings per common share	$	0.35		0.40		0.32		0.25		0.27
Diluted earnings per common share	$	0.35		0.40		0.32		0.25		0.27
Book value per share	$	16.83		16.47		16.05		15.97		14.80
Tangible book value per share	$	12.05		11.67		11.23		11.14		11.47
Weighted average common shares outstanding:
Basic	13,283,634			13,285,386		13,285,203		11,099,485		10,020,611
Diluted	13,287,338			13,290,499		13,290,665		11,105,014		10,028,588
Shares outstanding at period end	13,314,148			13,295,276		13,304,976		13,299,235		10,041,152
Selected Financial Ratios
Return on average assets	1.15		%	1.27	%	1.03	%	0.78	%	0.85	%
Return on average equity	8.47		%	9.55	%	7.76	%	6.46	%	7.33	%
Dividend payout ratio	48.57		%	42.50	%	50.00	%	64.00	%	59.26	%
Net interest margin (tax equivalent)	3.71		%	3.69	%	3.59	%	3.63	%	3.59	%
Efficiency ratio (tax equivalent)	65.61		%	60.58	%	63.69	%	74.69	%	73.39	%
Selected Balance Sheet Items
Cash and cash equivalents	$	19,527		20,040		19,812		24,901		17,494
Debt and equity securities	264,559			282,813		299,786		311,047		310,009
Loans:
Commercial and industrial	$	79,725		77,740		78,002		81,778		37,118
Commercial, secured by real estate	764,424			740,647		704,987		705,978		542,890
Residential real estate	334,227			349,127		347,920		339,435		246,487
Consumer	17,409			17,283		17,505		17,705		17,176
Agricultural	10,900			13,297		13,280		13,390		12,217
Other, including deposit overdrafts	409			450		498		583		506
Deferred net origination costs	40			79		133		229		263
Loans, gross	1,207,134			1,198,623		1,162,325		1,159,098		856,657
Less allowance for loan losses	4,126			4,046		4,016		3,603		3,529
Loans, net	$	1,203,008		1,194,577		1,158,309		1,155,495		853,128
Total earning assets	$	1,476,862		1,483,166		1,465,787		1,471,923		1,171,447
Total assets	1,632,387			1,636,927		1,620,299		1,631,442		1,288,791
Total deposits	1,347,857			1,300,919		1,371,023		1,380,884		1,123,463

	Three Months Ended
	3/31/2019			12/31/2018		9/30/2018		6/30/2018		3/31/2018
Selected Balance Sheet Items, continued
Short-term borrowings	0			56,230		0		0		0
Long-term debt	42,982			47,032		23,079		27,085		6,219
Total shareholders’ equity	224,018			218,985		213,515		212,366		148,584
Equity to assets ratio	13.72		%	13.38	%	13.18	%	13.02	%	11.53	%
Loans to deposits ratio	89.56		%	92.14	%	84.78	%	83.94	%	76.25	%
Tangible common equity (TCE)	$	160,488		155,197		149,398		147,705		114,801
Tangible common assets (TCA)	1,568,857			1,573,139		1,556,182		1,566,781		1,255,008
TCE/TCA	10.23		%	9.87	%	9.60	%	9.43	%	9.15	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	25,080		20,685		25,920		27,319		21,820
Debt and equity securities	266,081			291,433		304,112		306,366		313,689
Loans	$	1,208,809		1,177,061		1,155,846		961,726		853,152
Less allowance for loan losses	4,074			4,016		3,622		4,245		3,401
Net loans	$	1,204,735		1,173,045		1,152,224		957,481		849,751
Total earning assets	$	1,480,634		1,471,650		1,465,510		1,276,176		1,170,708
Total assets	1,635,416			1,626,029		1,623,016		1,409,698		1,292,375
Total deposits	1,333,529			1,333,673		1,367,950		1,212,104		1,114,979
Short-term borrowings	23,235			36,348		1,833		3,491		14,086
Long-term debt	44,676			25,536		25,757		13,252		2,255
Total shareholders’ equity	221,470			215,739		214,769		170,077		150,058
Equity to assets ratio	13.54		%	13.27	%	13.23	%	12.06	%	11.61	%
Loans to deposits ratio	90.65		%	88.26	%	84.49	%	79.34	%	76.52	%
Asset Quality
Net charge-offs (recoveries)	$	(185	)	(68	)	245		150		(47	)
Other real estate owned	244			244		35		35		—
Non-accrual loans	2,845			2,951		2,603		4,065		2,744
Loans past due 90 days or more and still accruing	177			149		1		5		146
Total nonperforming loans	$	3,022		3,100		2,604		4,070		2,890
Net charge-offs (recoveries) to average loans	(0.06		)%	(0.02	)%	0.08	%	0.06	%	(0.02	)%
Allowance for loan losses to total loans	0.34		%	0.34	%	0.35	%	0.31	%	0.41	%
Nonperforming loans to total loans	0.25		%	0.26	%	0.22	%	0.35	%	0.34	%
Nonperforming assets to total assets	0.20		%	0.20	%	0.16	%	0.25	%	0.22	%
Assets Under Management
LCNB Corp. total assets	$	1,632,387		1,636,927		1,620,299		1,631,442		1,288,791
Trust and investments (fair value)	367,649			337,549		386,582		370,587		359,766
Mortgage loans serviced	89,049			97,685		115,647		114,536		90,630
Cash management	55,981			48,906		36,502		48,369		72,372
Brokerage accounts (fair value)	245,758			233,751		247,175		238,651		230,168
Total assets managed	$	2,390,824		2,354,818		2,406,205		2,403,585		2,041,727
Non-GAAP Financial Measures
Net income	$	4,627		5,193		4,201		2,738		2,713
Add: merger-related expenses, net of tax	53			148		274		710		621
Adjusted net income	$	4,680		5,341		4,475		3,448		3,334
Basic adjusted earnings per share	0.36			0.41		0.34		0.31		0.33
Diluted adjusted earnings per share	0.36			0.41		0.34		0.31		0.33
Adjusted return on average assets	1.16		%	1.30	%	1.09	%	0.98	%	1.05	%
Adjusted return on average equity	8.57		%	9.82	%	8.27	%	8.13	%	9.01	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	March 31, 2019 (Unaudited)			December 31, 2018
ASSETS:
Cash and due from banks	$	14,358		18,310
Interest-bearing demand deposits	5,169			1,730
Total cash and cash equivalents	19,527			20,040
Interest-bearing time deposits	747			996
Investment securities:
Equity securities with a readily determinable fair value, at fair value	2,185			2,078
Equity securities without a readily determinable fair value, at cost	2,099			2,099
Debt securities, available-for-sale, at fair value	217,668			238,421
Debt securities, held-to-maturity, at cost	32,363			29,721
Federal Reserve Bank stock, at cost	4,652			4,653
Federal Home Loan Bank stock, at cost	4,845			4,845
Loans, net	1,203,008			1,194,577
Premises and equipment, net	32,548			32,627
Operating leases right of use asset	5,348			—
Goodwill	59,221			59,221
Core deposit and other intangibles	4,760			5,042
Bank owned life insurance	28,905			28,723
Other assets	14,511			13,884
TOTAL ASSETS	$	1,632,387		1,636,927
LIABILITIES:
Deposits:
Noninterest-bearing	$	330,324		322,571
Interest-bearing	1,017,533			978,348
Total deposits	1,347,857			1,300,919
Short-term borrowings	—			56,230
Long-term debt	42,982			47,032
Operating leases liability	5,289			—
Accrued interest and other liabilities	12,241			13,761
TOTAL LIABILITIES	1,408,369			1,417,942
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, 2019 and December 31, 2018; issued 14,089,175 and 14,070,303 shares at March 31, 2019 and December 31, 2018, respectively	141,349			141,170
Retained earnings	96,912			94,547
Treasury shares at cost, 775,027 at March 31, 2019 and December 31, 2018	(12,013		)	(12,013	)
Accumulated other comprehensive loss, net of taxes	(2,230		)	(4,719	)
TOTAL SHAREHOLDERS' EQUITY	224,018			218,985
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,632,387		1,636,927

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended  March 31,
	2019			2018
INTEREST INCOME:
Interest and fees on loans	$	14,538		9,413
Dividends on equity securities with a readily determinable fair value	17			15
Dividends on equity securities without a readily determinable fair value	16			7
Interest on debt securities, taxable	869			931
Interest on debt securities, non-taxable	544			704
Other short-term investments	129			72
TOTAL INTEREST INCOME	16,113			11,142
INTEREST EXPENSE:
Interest on deposits	2,286			871
Interest on short-term borrowings	219			69
Interest on long-term debt	217			14
TOTAL INTEREST EXPENSE	2,722			954
NET INTEREST INCOME	13,391			10,188
PROVISION FOR LOAN LOSSES	(105		)	79
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	13,496			10,109
NON-INTEREST INCOME:
Fiduciary income	1,034			964
Service charges and fees on deposit accounts	1,308			1,305
Net gains (losses) on sales of debt securities	(18		)	—
Bank owned life insurance income	182			186
Gains from sales of loans	29			22
Other operating income	237			159
TOTAL NON-INTEREST INCOME	2,772			2,636
NON-INTEREST EXPENSE:
Salaries and employee benefits	6,162			4,977
Equipment expenses	266			253
Occupancy expense, net	763			727
State financial institutions tax	438			303
Marketing	302			132
Amortization of intangibles	257			185
FDIC insurance premiums	126			99
Contracted services	464			315
Other real estate owned	3			2
Merger-related expenses	67			758
Other non-interest expense	1,852			1,798
TOTAL NON-INTEREST EXPENSE	10,700			9,549
INCOME BEFORE INCOME TAXES	5,568			3,196
PROVISION FOR INCOME TAXES	941			483
NET INCOME	$	4,627		2,713
Dividends declared per common share	$	0.17		0.16
Earnings per common share:
Basic	0.35			0.27
Diluted	0.35			0.27
Weighted average common shares outstanding:
Basic	13,283,634			10,020,611
Diluted	13,287,338			10,028,588

Contacts

LCNB Corp.

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

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