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											Six Months Ended
	6/30/2019			3/31/2019		12/31/2018		9/30/2018		6/30/2018		6/30/2019		6/30/2018
Condensed Income Statement
Interest income	$	16,328		16,113		15,844		15,070		12,538		32,441		23,680
Interest expense	2,738			2,722		2,334		1,967		1,170		5,460		2,124
Net interest income	13,590			13,391		13,510		13,103		11,368		26,981		21,556
Provision (credit) for loan losses	54			(105	)	(39	)	659		224		(51	)	303
Net interest income after provision	13,536			13,496		13,549		12,444		11,144		27,032		21,253
Non-interest income	2,998			2,772		2,702		2,921		2,791		5,770		5,427
Non-interest expense	10,833			10,700		9,925		10,317		10,711		21,533		20,260
Income before income taxes	5,701			5,568		6,326		5,048		3,224		11,269		6,420
Provision for income taxes	973			941		1,133		847		486		1,914		969
Net income	$	4,728		4,627		5,193		4,201		2,738		9,355		5,451
Amort/Accret income on acquired loans	$	355		224		229		198		44		579		140
Amort/Accret expenses on acquired interest-bearing liabilities	$	142		144		149		214		—		286		—
Tax-equivalent net interest income	$	13,700		13,536		13,680		13,279		11,549		27,236		21,924
Per Share Data
Dividends per share	$	0.17		0.17		0.17		0.16		0.16		0.34		0.32
Basic earnings per common share	$	0.36		0.35		0.40		0.32		0.25		0.71		0.52
Diluted earnings per common share	$	0.36		0.35		0.40		0.32		0.25		0.71		0.52
Book value per share	$	17.18		16.83		16.47		16.05		15.97		17.18		15.97
Tangible book value per share	$	12.31		12.05		11.67		11.23		11.14		12.31		11.14
Weighted average common shares outstanding:
Basic	13,192,691			13,283,634		13,285,386		13,285,203		11,099,485		13,237,909		10,563,030
Diluted	13,196,665			13,287,338		13,290,499		13,290,665		11,105,014		13,241,752		10,568,792
Shares outstanding at period end	12,978,554			13,314,148		13,295,276		13,304,976		13,299,235		12,978,554		13,299,235
Selected Financial Ratios
Return on average assets	1.16		%	1.15	%	1.27	%	1.03	%	0.78	%	1.15	%	0.81	%
Return on average equity	8.46		%	8.47	%	9.55	%	7.76	%	6.46	%	8.47	%	6.87	%
Dividend payout ratio	47.22		%	48.57	%	42.50	%	50.00	%	64.00	%	47.89	%	61.54	%
Net interest margin (tax equivalent)	3.72		%	3.71	%	3.69	%	3.59	%	3.63	%	3.71	%	3.61	%
Efficiency ratio (tax equivalent)	64.87		%	65.61	%	60.58	%	63.69	%	74.69	%	65.24	%	74.07	%
Selected Balance Sheet Items
Cash and cash equivalents	$	23,185		19,527		20,040		19,812		24,901
Debt and equity securities	246,701			264,559		282,813		299,786		311,047
Loans:
Commercial and industrial	$	79,513		79,725		77,740		78,002		81,778
Commercial, secured by real estate	793,863			764,424		740,647		704,987		705,978
Residential real estate	326,029			334,227		349,127		347,920		339,435
Consumer	19,649			17,409		17,283		17,505		17,705
Agricultural	10,843			10,900		13,297		13,280		13,390
Other, including deposit overdrafts	373			409		450		498		583
Deferred net origination costs (fees)	(9		)	40		79		133		229
Loans, gross	1,230,261			1,207,134		1,198,623		1,162,325		1,159,098
Less allowance for loan losses	4,112			4,126		4,046		4,016		3,603
Loans, net	$	1,226,149		1,203,008		1,194,577		1,158,309		1,155,495
Total earning assets	$	1,482,913		1,476,862		1,483,166		1,465,787		1,471,923
Total assets	1,642,012			1,632,387		1,636,927		1,620,299		1,631,442
Total deposits	1,357,959			1,347,857		1,300,919		1,371,023		1,380,884

	Three Months Ended											Six Months Ended
	6/30/2019			3/31/2019		12/31/2018		9/30/2018		6/30/2018		6/30/2019		6/30/2018
Selected Balance Sheet Items, continued
Short-term borrowings	0			0		56,230		0		0
Long-term debt	41,986			42,982		47,032		23,079		27,085
Total shareholders’ equity	222,972			224,018		218,985		213,515		212,366
Equity to assets ratio	13.58		%	13.72	%	13.38	%	13.18	%	13.02	%
Loans to deposits ratio	90.60		%	89.56	%	92.14	%	84.78	%	83.94	%
Tangible common equity (TCE)	$	159,702		160,488		155,197		149,398		147,705
Tangible common assets (TCA)	1,578,742			1,568,857		1,573,139		1,556,182		1,566,781
TCE/TCA	10.12		%	10.23	%	9.87	%	9.60	%	9.43	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	29,523		25,080		20,685		25,920		27,319		27,332		24,601
Debt and equity securities	249,954			266,081		291,433		304,112		306,366		257,972		310,007
Loans	$	1,217,726		1,208,809		1,177,061		1,155,846		961,726		1,213,292		907,739
Less allowance for loan losses	4,088			4,074		4,016		3,622		4,245		4,081		3,825
Net loans	$	1,213,638		1,204,735		1,173,045		1,152,224		957,481		1,209,211		903,914
Total earning assets	$	1,479,225		1,480,634		1,471,650		1,465,510		1,276,176		1,479,924		1,223,733
Total assets	1,637,645			1,635,416		1,626,029		1,623,016		1,409,698		1,636,370		1,351,355
Total deposits	1,352,449			1,333,529		1,333,673		1,367,950		1,212,104		1,343,042		1,163,810
Short-term borrowings	243			23,235		36,348		1,833		3,491		11,675		8,759
Long-term debt	42,567			44,676		25,536		25,757		13,252		43,616		7,784
Total shareholders’ equity	224,203			221,470		215,739		214,769		170,077		222,844		160,123
Equity to assets ratio	13.69		%	13.54	%	13.27	%	13.23	%	12.06	%	13.62	%	11.85	%
Loans to deposits ratio	90.04		%	90.65	%	88.26	%	84.49	%	79.34	%	90.34	%	78.00	%
Asset Quality
Net charge-offs (recoveries)	$	68		(185	)	(68	)	245		150		(117	)	103
Other real estate owned	197			244		244		35		35		197		35
Non-accrual loans	2,962			2,845		2,951		2,603		4,065		2,962		4,065
Loans past due 90 days or more and still accruing	24			177		149		1		5		24		5
Total nonperforming loans	$	2,986		3,022		3,100		2,604		4,070		2,986		4,070
Net charge-offs (recoveries) to average loans	0.02		%	(0.06	)%	(0.02	)%	0.08	%	0.06	%	(0.02	)%	0.02	%
Allowance for loan losses to total loans	0.33		%	0.34	%	0.34	%	0.35	%	0.31	%	0.33	%	0.31	%
Nonperforming loans to total loans	0.24		%	0.25	%	0.26	%	0.22	%	0.35	%	0.24	%	0.35	%
Nonperforming assets to total assets	0.19		%	0.20	%	0.20	%	0.16	%	0.25	%	0.19	%	0.25	%
Assets Under Management
LCNB Corp. total assets	$	1,642,012		1,632,387		1,636,927		1,620,299		1,631,442
Trust and investments (fair value)	382,462			367,649		337,549		386,582		370,587
Mortgage loans serviced	88,444			89,049		97,685		115,647		114,536
Cash management	71,973			55,981		48,906		36,502		48,369
Brokerage accounts (fair value)	260,202			245,758		233,751		247,175		238,651
Total assets managed	$	2,445,093		2,390,824		2,354,818		2,406,205		2,403,585
Non-GAAP Financial Measures
Net income	$	4,728		4,627		5,193		4,201		2,738		9,355		5,451
Add: merger-related expenses, net of tax	16			53		148		274		710		69		1,331
Adjusted net income	$	4,744		4,680		5,341		4,475		3,448		9,424		6,782
Basic adjusted earnings per share	0.36			0.36		0.41		0.34		0.31		0.71		0.64
Diluted adjusted earnings per share	0.36			0.36		0.41		0.34		0.31		0.71		0.64
Adjusted return on average assets	1.16		%	1.16	%	1.30	%	1.09	%	0.98	%	1.16	%	1.01	%
Adjusted return on average equity	8.49		%	8.57	%	9.82	%	8.27	%	8.13	%	8.53	%	8.54	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	June 30, 2019 (Unaudited)			December 31, 2018
ASSETS:
Cash and due from banks	$	17,234		18,310
Interest-bearing demand deposits	5,951			1,730
Total cash and cash equivalents	23,185			20,040
Interest-bearing time deposits	498			996
Investment securities:
Equity securities with a readily determinable fair value, at fair value	2,246			2,078
Equity securities without a readily determinable fair value, at cost	2,099			2,099
Debt securities, available-for-sale, at fair value	198,660			238,421
Debt securities, held-to-maturity, at cost	33,343			29,721
Federal Reserve Bank stock, at cost	4,652			4,653
Federal Home Loan Bank stock, at cost	5,203			4,845
Loans, net	1,226,149			1,194,577
Premises and equipment, net	33,013			32,627
Operating leases right of use asset	5,686			—
Goodwill	59,221			59,221
Core deposit and other intangibles	4,494			5,042
Bank owned life insurance	29,088			28,723
Other assets	14,475			13,884
TOTAL ASSETS	$	1,642,012		1,636,927
LIABILITIES:
Deposits:
Noninterest-bearing	$	335,474		322,571
Interest-bearing	1,022,485			978,348
Total deposits	1,357,959			1,300,919
Short-term borrowings	—			56,230
Long-term debt	41,986			47,032
Operating leases liability	5,615			—
Accrued interest and other liabilities	13,480			13,761
TOTAL LIABILITIES	1,419,040			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 June 30, 2019 and December 31, 2018; issued 14,095,666 and 14,070,303 shares at June 30, 2019 and December 31, 2018, respectively	141,479			141,170
Retained earnings	99,400			94,547
Treasury shares at cost, 1,117,112 and 775,027 shares at June 30, 2019 and December 31, 2018	(17,854		)	(12,013	)
Accumulated other comprehensive loss, net of taxes	(53		)	(4,719	)
TOTAL SHAREHOLDERS' EQUITY	222,972			218,985
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,642,012		1,636,927

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended  June 30,				Six Months Ended  June 30,
	2019		2018		2019		2018
INTEREST INCOME:
Interest and fees on loans	$	14,662	10,703		29,200		20,116
Dividends on equity securities with a readily determinable fair value	15		16		32		31
Dividends on equity securities without a readily determinable fair value	16		8		32		15
Interest on debt securities, taxable	933		934		1,802		1,865
Interest on debt securities, non-taxable	417		680		961		1,384
Other short-term investments	285		197		414		269
TOTAL INTEREST INCOME	16,328		12,538		32,441		23,680
INTEREST EXPENSE:
Interest on deposits	2,464		1,096		4,750		1,967
Interest on short-term borrowings	2		7		221		76
Interest on long-term debt	272		67		489		81
TOTAL INTEREST EXPENSE	2,738		1,170		5,460		2,124
NET INTEREST INCOME	13,590		11,368		26,981		21,556
PROVISION (CREDIT) FOR LOAN LOSSES	54		224		(51	)	303
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES	13,536		11,144		27,032		21,253
NON-INTEREST INCOME:
Fiduciary income	1,058		942		2,092		1,906
Service charges and fees on deposit accounts	1,497		1,426		2,805		2,731
Net gains (losses) on sales of debt securities	1		(1	)	(17	)	(1	)
Bank owned life insurance income	183		182		365		368
Gains from sales of loans	64		97		93		119
Other operating income	195		145		432		304
TOTAL NON-INTEREST INCOME	2,998		2,791		5,770		5,427
NON-INTEREST EXPENSE:
Salaries and employee benefits	6,243		5,128		12,405		10,105
Equipment expenses	278		268		544		521
Occupancy expense, net	744		658		1,507		1,385
State financial institutions tax	436		296		874		599
Marketing	297		284		599		416
Amortization of intangibles	260		188		517		373
FDIC insurance premiums	112		99		238		198
Contracted services	475		391		939		706
Other real estate owned	48		1		51		3
Merger-related expenses	20		855		87		1,613
Other non-interest expense	1,920		2,543		3,772		4,341
TOTAL NON-INTEREST EXPENSE	10,833		10,711		21,533		20,260
INCOME BEFORE INCOME TAXES	5,701		3,224		11,269		6,420
PROVISION FOR INCOME TAXES	973		486		1,914		969
NET INCOME	$	4,728	2,738		9,355		5,451
Dividends declared per common share	$	0.17	0.16		0.34		0.32
Earnings per common share:
Basic	0.36		0.25		0.71		0.52
Diluted	0.36		0.25		0.71		0.52
Weighted average common shares outstanding:
Basic	13,192,691		11,099,485		13,237,909		10,563,030
Diluted	13,196,665		11,105,014		13,241,752		10,568,792

Contacts

LCNB Corp.

Eric J. Meilstrup, CEO, 800-344-BANK

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