EX-99.2 3 lcnb-x8xkexhibit9922015qr4.htm EXHIBIT 99.2 Exhibit


Exhibit 99.2

LCNB Corp. and Subsidiaries
Financial Highlights
(Dollars in thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
 
Year Ended
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
12/31/2014
 
12/31/2015
 
12/31/2014
Condensed Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
10,812

 
10,409

 
11,348

 
10,090

 
10,367

 
42,659

 
39,477

Interest expense
906

 
912

 
748

 
762

 
844

 
3,328

 
3,590

Net interest income
9,906

 
9,497

 
10,600

 
9,328

 
9,523

 
39,331

 
35,887

Provision for loan losses
380

 
240

 
677

 
69

 
193

 
1,366

 
930

Net interest income after provision
9,526

 
9,257

 
9,923

 
9,259

 
9,330

 
37,965

 
34,957

Non-interest income
2,600

 
2,386

 
2,831

 
2,306

 
2,449

 
10,123

 
9,142

Non-interest expense
8,229

 
8,088

 
8,426

 
7,649

 
7,334

 
32,392

 
30,844

Income before income taxes
3,897

 
3,555

 
4,328

 
3,916

 
4,445

 
15,696

 
13,255

Provision for income taxes
1,013

 
922

 
1,205

 
1,082

 
1,228

 
4,222

 
3,386

Net income
$
2,884

 
2,633

 
3,123

 
2,834

 
3,217

 
11,474

 
9,869

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per Share Data
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends per share
$
0.16

 
0.16

 
0.16

 
0.16

 
0.16

 
0.64

 
0.64

Basic earnings per share
$
0.29

 
0.26

 
0.33

 
0.30

 
0.34

 
1.18

 
1.06

Diluted earnings per share
$
0.29

 
0.26

 
0.32

 
0.30

 
0.34

 
1.17

 
1.05

Book value per share
$
14.12

 
14.22

 
13.91

 
13.80

 
13.50

 
14.12

 
13.50

Tangible book value per share
$
10.58

 
10.66

 
10.33

 
10.40

 
10.08

 
10.58

 
10.08

Average basic shares outstanding
9,905,612

 
9,898,233

 
9,694,732

 
9,312,636

 
9,306,382

 
9,704,965

 
9,297,019

Average diluted shares outstanding
10,014,908

 
10,005,788

 
9,804,728

 
9,410,774

 
9,403,013

 
9,811,476

 
9,406,346

Shares outstanding at period end
9,925,547

 
9,903,294

 
9,896,904

 
9,317,583

 
9,311,318

 
9,925,547

 
9,311,318

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Financial Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
0.89
%
 
0.82
%
 
1.03
%
 
1.02
%
 
1.14
%
 
0.94
%
 
0.88
%
Return on average equity
8.07
%
 
7.51
%
 
9.21
%
 
9.01
%
 
10.18
%
 
8.43
%
 
8.04
%
Dividend payout ratio
55.17
%
 
61.54
%
 
48.48
%
 
53.33
%
 
47.06
%
 
54.24
%
 
60.38
%
Net interest margin (tax equivalent)
3.46
%
 
3.37
%
 
3.95
%
 
3.83
%
 
3.82
%
 
3.64
%
 
3.66
%
Efficiency ratio (tax equivalent)
63.80
%
 
65.97
%
 
61.08
%
 
63.90
%
 
59.48
%
 
63.61
%
 
66.44
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Balance Sheet Items
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities and stock
$
406,981

 
391,430

 
378,651

 
329,429

 
314,074

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
45,275

 
45,325

 
47,958

 
36,447

 
35,424

 
 
 
 
Commercial, secured by real estate
419,633

 
407,264

 
399,551

 
381,371

 
379,141

 
 
 
 
Residential real estate
273,139

 
274,054

 
273,249

 
255,926

 
254,087

 
 
 
 
Consumer
18,510

 
19,283

 
19,718

 
17,296

 
18,006

 
 
 
 
  Agricultural
13,479

 
16,016

 
13,434

 
9,816

 
11,472

 
 
 
 
Other, including deposit overdrafts
665

 
676

 
638

 
678

 
680

 
 
 
 
Deferred net origination costs
237

 
215

 
188

 
151

 
146

 
 
 
 
  Loans, gross
770,938

 
762,833

 
754,736

 
701,685

 
698,956

 
 
 
 
Less allowance for loan losses
3,129

 
2,958

 
2,879

 
2,837

 
3,121

 
 
 
 
  Loans, net
$
767,809

 
759,875

 
751,857

 
698,848

 
695,835

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,280,531

 
1,275,171

 
1,249,363

 
1,129,497

 
1,108,066

 
 
 
 
Total deposits
1,087,160

 
1,103,513

 
1,084,033

 
973,725

 
946,205

 
 
 
 
Short-term borrowings
37,387

 
14,931

 
12,731

 
13,454

 
16,645

 
 
 
 
Long-term debt
5,947

 
6,016

 
6,085

 
6,153

 
11,357

 
 
 
 
Total shareholders’ equity
140,108

 
140,851

 
137,698

 
128,576

 
125,695

 
 
 
 
Equity to assets ratio
10.94
%
 
11.05
%
 
11.02
%
 
11.38
%
 
11.34
%
 
 
 
 
Loans to deposit ratio
70.91
%
 
69.13
%
 
69.62
%
 
72.06
%
 
73.87
%
 
 
 
 





 
Three Months Ended
 
Year Ended
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
12/31/2014
 
12/31/2015
 
12/31/2014
Selected Balance Sheet Items, continued
 
 
 
 
 
 
 
 
 
 
 
 
Tangible common equity (TCE)
$
104,529

 
105,063

 
101,694

 
96,340

 
93,277

 
 
 
 
Tangible common assets (TCA)
1,244,952

 
1,239,383

 
1,213,359

 
1,097,261

 
1,075,648

 
 
 
 
TCE/TCA
8.40
%
 
8.48
%
 
8.38
%
 
8.78
%
 
8.67
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Average Balance Sheet Items
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities and stock
$
406,423

 
385,353

 
360,750

 
313,279

 
311,395

 
366,758

 
327,704

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
$
764,440

 
760,159

 
737,021

 
699,959

 
694,185

 
740,626

 
679,223

Less allowance for loan losses
2,929

 
2,885

 
2,865

 
2,870

 
3,075

 
2,888

 
3,275

Net loans
$
761,511

 
757,274

 
734,156

 
697,089

 
691,110

 
737,738

 
675,948

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,285,114

 
1,267,171

 
1,220,938

 
1,125,326

 
1,123,949

 
1,225,112

 
1,120,515

Total deposits
1,107,214

 
1,099,730

 
1,057,818

 
969,658

 
967,505

 
1,059,095

 
964,526

Short-term borrowings
20,290

 
13,450

 
12,803

 
13,824

 
12,217

 
15,105

 
14,820

Long-term debt
5,970

 
6,040

 
6,108

 
6,598

 
11,382

 
6,177

 
11,546

Total shareholders’ equity
141,751

 
139,032

 
136,003

 
127,608

 
125,302

 
136,145

 
122,716

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs
$
210

 
160

 
636

 
352

 
370

 
 
 
 
Other real estate owned
846

 
1,208

 
1,364

 
1,364

 
1,370

 
 
 
 
Non-accrual loans
1,722

 
2,254

 
1,961

 
3,972

 
5,599

 
 
 
 
Loans past due 90 days or more and still accruing
559

 
130

 
128

 
355

 
203

 
 
 
 
Total nonperforming loans
$
2,281

 
2,384

 
2,089

 
4,327

 
5,802

 


 
 
Net charge-offs to average loans
0.11
%
 
0.08
%
 
0.35
%
 
0.20
%
 
0.21
%
 
 
 
 
Allowance for loan losses to total loans
0.41
%
 
0.39
%
 
0.38
%
 
0.40
%
 
0.45
%
 



 
Nonperforming loans to total loans
0.30
%
 
0.31
%
 
0.28
%
 
0.62
%
 
0.83
%
 



 
Nonperforming assets to total assets
0.24
%
 
0.28
%
 
0.28
%
 
0.50
%
 
0.65
%
 



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets Under Management
 
 
 
 
 
 
 
 
 
 
 
 
 
LCNB Corp. total assets
$
1,280,531

 
1,275,171

 
1,249,363

 
1,129,497

 
1,108,066

 
 
 
 
Trust and investments (fair value)
283,193

 
258,675

 
272,209

 
264,122

 
258,266

 
 
 
 
Mortgage loans serviced
111,837

 
113,610

 
117,204

 
116,534

 
120,433

 
 
 
 
Business cash management
7,271

 
6,809

 
6,628

 
5,839

 
5,811

 
 
 
 
Brokerage accounts (fair value)
148,956

 
142,151

 
144,186

 
141,439

 
132,823

 
 
 
 
Total assets managed
$
1,831,788

 
1,796,416

 
1,789,590

 
1,657,431

 
1,625,399

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
Accreted income on acquired loans
$
219

 
243

 
1,348

 
326

 
442

 
2,136

 
1,553

Amortization of acquired deposit premiums
$
34

 
46

 
211

 
186

 
191

 
477

 
801

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
2,884

 
2,633

 
3,123

 
2,834

 
3,217

 
11,474

 
9,869

Less (add) net gain (loss) on sales of securities, net of tax
108

 
0

 
146

 
73

 
37

 
327

 
98

Add merger-related expenses, net of tax
2

 
32

 
363

 
66

 
26

 
463

 
928

Core net income
$
2,778

 
2,665

 
3,340

 
2,827

 
3,206

 
11,610

 
10,699

Basic core earnings per share
$
0.28

 
0.27

 
0.34

 
0.30

 
0.34

 
1.20

 
1.15

Diluted core earnings per share
$
0.28

 
0.27

 
0.34

 
0.30

 
0.34

 
1.18

 
1.14

Adjusted return on average assets
0.86
%
 
0.83
%
 
1.10
%
 
1.01
%
 
1.13
%
 
0.95
%
 
0.95
%
Adjusted return on average equity
7.77
%
 
7.60
%
 
9.85
%
 
8.86
%
 
10.06
%
 
8.53
%
 
8.67
%
Core efficiency ratio (tax equivalent)
64.60
%
 
65.57
%
 
58.23
%
 
63.91
%
 
59.48
%
 
62.96
%
 
63.62
%





LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)
 
 
December 31, 2015 (Unaudited)
 
December 31, 2014
ASSETS:
 
 
 
 
Cash and due from banks
 
$
14,155

 
14,235

Interest-bearing demand deposits
 
832

 
1,610

Total cash and cash equivalents
 
14,987

 
15,845

Investment securities:
 
 

 
 

Available-for-sale, at fair value
 
377,978

 
285,365

Held-to-maturity, at cost
 
22,633

 
22,725

Federal Reserve Bank stock, at cost
 
2,732

 
2,346

Federal Home Loan Bank stock, at cost
 
3,638

 
3,638

Loans, net
 
767,809

 
695,835

Premises and equipment, net
 
22,100

 
20,733

Goodwill
 
30,183

 
27,638

Core deposit and other intangibles
 
5,396

 
4,780

Bank owned life insurance
 
22,561

 
21,936

Other assets
 
10,514

 
7,225

TOTAL ASSETS
 
$
1,280,531

 
1,108,066

LIABILITIES:
 
 

 
 

Deposits:
 
 

 
 

Noninterest-bearing
 
$
250,306

 
213,303

Interest-bearing
 
836,854

 
732,902

Total deposits
 
1,087,160

 
946,205

Short-term borrowings
 
37,387

 
16,645

Long-term debt
 
5,947

 
11,357

Accrued interest and other liabilities
 
9,929

 
8,164

TOTAL LIABILITIES
 
1,140,423

 
982,371

SHAREHOLDERS' EQUITY:
 
 

 
 

Preferred shares – no par value, authorized 1,000,000 shares, none outstanding
 

 

Common shares – no par value, authorized 12,000,000 shares, issued 10,679,174 and 10,064,945 shares at December 31, 2015 and December 31, 2014, respectively
 
76,908

 
67,181

Retained earnings
 
74,629

 
69,394

Treasury shares at cost, 753,627 shares at December 31, 2015 and December 31, 2014
 
(11,665
)
 
(11,665
)
Accumulated other comprehensive loss, net of taxes
 
236

 
785

TOTAL SHAREHOLDERS' EQUITY
 
140,108

 
125,695

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
1,280,531

 
1,108,066










LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
 
Three Months Ended 
 December 31,
 
Year Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
INTEREST INCOME:
 
 
 
 
 
 
 
Interest and fees on loans
$
8,713

 
8,698

 
35,285

 
32,706

Interest on investment securities –
 
 
 

 
 

 
 

Taxable
1,214

 
856

 
4,197

 
3,757

Non-taxable
761

 
694

 
2,848

 
2,713

Other short-term investments
124

 
119

 
329

 
301

TOTAL INTEREST INCOME
10,812

 
10,367

 
42,659

 
39,477

INTEREST EXPENSE:
 

 
 

 
 

 
 

Interest on deposits
822

 
738

 
3,009

 
3,161

Interest on short-term borrowings
11

 
4

 
24

 
22

Interest on long-term debt
73

 
102

 
295

 
407

TOTAL INTEREST EXPENSE
906

 
844

 
3,328

 
3,590

NET INTEREST INCOME
9,906

 
9,523

 
39,331

 
35,887

PROVISION FOR LOAN LOSSES
380

 
193

 
1,366

 
930

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
9,526

 
9,330

 
37,965

 
34,957

NON-INTEREST INCOME:
 

 
 

 
 

 
 

Trust income
856

 
832

 
3,262

 
2,903

Service charges and fees on deposit accounts
1,265

 
1,219

 
4,920

 
4,838

Net gain (loss) on sales of securities
163

 
56

 
495

 
149

Bank owned life insurance income
155

 
164

 
625

 
671

Gains from sales of mortgage loans
55

 
55

 
343

 
147

Other operating income
106

 
123

 
478

 
434

TOTAL NON-INTEREST INCOME
2,600

 
2,449

 
10,123

 
9,142

NON-INTEREST EXPENSE:
 

 
 

 
 

 
 

Salaries and employee benefits
4,582

 
3,866

 
17,593

 
15,762

Equipment expenses
343

 
340

 
1,257

 
1,316

Occupancy expense, net
558

 
526

 
2,307

 
2,232

State franchise tax
248

 
241

 
1,001

 
955

Marketing
161

 
162

 
720

 
703

Amortization of intangibles
190

 
150

 
700

 
574

FDIC insurance premiums
166

 
168

 
598

 
660

Merger-related expenses
2

 
34

 
643

 
1,400

Other non-interest expense
1,979

 
1,847

 
7,573

 
7,242

TOTAL NON-INTEREST EXPENSE
8,229

 
7,334

 
32,392

 
30,844

INCOME BEFORE INCOME TAXES
3,897

 
4,445

 
15,696

 
13,255

PROVISION FOR INCOME TAXES
1,013

 
1,228

 
4,222

 
3,386

NET INCOME
$
2,884

 
3,217

 
11,474

 
9,869

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.16

 
0.16

 
0.64

 
0.64

Earnings per common share:
 

 
 

 
 

 
 

Basic
$
0.29

 
0.34

 
1.18

 
1.06

Diluted
0.29

 
0.34

 
1.17

 
1.05

Weighted average common shares outstanding:
 
 
 

 
 
 
 

Basic
9,905,612

 
9,306,382

 
9,704,965

 
9,297,019

Diluted
10,014,908

 
9,403,013

 
9,811,476

 
9,406,346