8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 18, 2016

LCNB CORP.

(Exact name of Registrant as specified in its Charter)

Ohio	0-26121	31-1626393
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification Number)

2 North Broadway, Lebanon, Ohio	45036
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (513) 932-1414

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

__    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

__    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

__    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

__    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 18, 2016, LCNB Corp. issued an earnings release announcing its financial results for the second quarter ended June 30, 2016. A copy of the earnings release (Exhibit 99.1) and unaudited financial highlights (Exhibit 99.2) are attached and are furnished under this Item 2.02.

Item 7.01 Regulation FD Disclosure.

On July 18, 2016, LCNB Corp. issued an earnings release announcing its financial results for the second quarter ended June 30, 2016. A copy of the earnings release (Exhibit 99.1) and unaudited financial highlights (Exhibit 99.2) are attached and are furnished under this Item 7.01.

Item 9.01 Financial Statements and Exhibits.

(d)    Exhibits.

Exhibit No.        Description

99.1 Earnings Press Release Dated July 18, 2016

99.2 Unaudited Financial Highlights

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	LCNB CORP.
Date: July 18, 2016	By: /s/ Robert C. Haines II
		Robert C. Haines II Chief Financial Officer

EX-99.1

Exhibit 99.1

Press Release

July 18, 2016

LCNB CORP. REPORTS FINANCIAL RESULTS FOR

THE THREE AND SIX MONTHS ENDED JUNE 30, 2016

LCNB Corp. (LCNB) today announced net income of $2,968,000 (total basic and diluted earnings per share of $0.30 and $0.29, respectively) and $5,932,000 (total basic and diluted earnings per share of $0.60 and $0.59, respectively) for the three and six months ended June 30, 2016, respectively.  This compares to net income of $3,123,000 (total basic and diluted earnings per share of $0.33 and $0.32) and $5,957,000 (total basic and diluted earnings per share of $0.63 and $0.62) for the same three and six-month periods in 2015. Results for 2016 were significantly affected by the acquisition of BNB Bancorp, Inc. ("BNB") on April 30, 2015. In addition, LCNB sold impaired loans with a carrying value of approximately $4.5 million during the second quarter 2015.

Commenting on the financial results, LCNB Chief Executive Officer Steve Foster said, "we are pleased to present our financial results for the three and six months ended June 30, 2016. Although net income for 2016 is less than 2015 thus far, the decrease is primarily due to two one-time expenses that were recognized to position us for increased future profitability. The first of which is a $251,000 penalty incurred during the first quarter for the early payoff of a now high-rate Federal Home Loan Bank borrowing, which will significantly decrease future interest expense. The second is a $346,000 write-down of a commercial other real estate owned property to its estimated liquidation value as we prepare to auction the property.

" LCNB remains committed during 2016 to projects and activities that will strengthen our infrastructure and provide for continued growth and expansion. Construction continues on our new Operations Center in Lebanon, Ohio, which will increase employee efficiency and enhance customer service when completed. A new mobile banking application was released to customers during the second quarter, and organic loan growth during the six month period of 2016 was $29.5 million, contributing to increased net interest income."

Net interest income for the three and six months ended June 30, 2016 decreased $475,000 and $31,000, respectively, from the comparable periods in 2015, due primarily to the absence during 2016 of non-accrual interest recognized as a result of the 2015 impaired loan sale mentioned above, partially offset by organic growth in LCNB's loan portfolio.

The provision for loan losses for the three and six months ended June 30, 2016 was $281,000 and $260,000, respectively, less than the comparable periods in 2015. Net loan charge-offs for for the six months ended June 30, 2016 and 2015 totaled $242,000 and $988,000, respectively.  The 2015 balance includes charge-offs recognized as a result of the impaired loan sale mentioned above. Non-accrual loans and loans past due 90 days or more and still accruing interest increased $784,000, from $2,282,000 or 0.30% of total loans at December 31, 2015, to $3,066,000 or 0.38% of total loans at June 30, 2016, primarily due to two loans to the same borrower totaling $1,307,000 that were newly classified as non-accrual during the first quarter 2016.  Other real estate owned (which includes property acquired through foreclosure or deed-in-lieu of foreclosure) decreased from $846,000 at December 31, 2015 to $682,000 at June 30, 2016 due to a write-down totaling $346,000 recognized on commercial property, partially offset by an addition to this category.

Non-interest income for the three months ended June 30, 2016 was $81,000 less than the comparable period in 2015 primarily due to a decrease in gains from sales of loans. The decrease reflects the absence of gains recognized as a result of the impaired loan sale in 2015. Non-interest income for the six months ended June 30, 2016 was $255,000 greater than the comparable period in 2015 primarily due gains from sales of investment securities, partially offset by the decrease in gains from sales of loans.

Non-interest expense for the three and six months ended June 30, 2016 was $42,000 and $685,000, respectively, greater than the comparable periods in 2015. The increase for the quarter was primarily due to increases in salaries and employee benefits and the write-down of other real estate owned property mentioned above, largely offset by the absence of merger expenses during the second quarter 2016. The six-month period increased for substantially the same reasons as the quarter plus a $251,000 penalty for early payoff of a $5 million Federal Home Loan Bank ("FHLB") advance recognized during the first quarter 2016. The FHLB advance had an interest rate of 5.25% and was paid off to reduce interest expense on long-term debt. Salaries and employee benefits increased primarily due to salary and wage increases, employees retained from the BNB acquisition, and an increase in the number of employees in addition to the acquisition.

LCNB Corp. is a financial holding company headquartered in Lebanon, Ohio. Through its subsidiary, LCNB National Bank (the “Bank”), it serves customers and communities in Southwest and South Central Ohio. A financial institution with a long tradition for building strong relationships with customers and communities, the Bank offers convenient banking locations in Butler, Clermont, Clinton, Fayette, Hamilton, Montgomery, Preble, Ross and Warren Counties, Ohio. The Bank continually strives to exceed customer expectations and provides an array of services for all personal and business banking needs including checking, savings, online banking, personal lending, business lending, agricultural lending, business support, deposit and treasury, investment services, trust and IRAs and stock purchases. LCNB Corp. common shares are traded on the NASDAQ Capital Market Exchange® under the symbol “LCNB.” Learn more about LCNB Corp. at www.lcnb.com.

Certain statements made in this news release regarding LCNB’s financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions.

These forward-looking statements reflect management's current expectations based on all information available to management and its knowledge of LCNB’s business and operations. Additionally, LCNB’s financial condition, results of operations, plans, objectives, future performance and business are subject to risks and uncertainties that may cause actual results to differ materially. These factors include, but are not limited to:

1. the success, impact, and timing of the implementation of LCNB’s business strategies;

2. LCNB may incur increased charge-offs in the future;

3. LCNB may face competitive loss of customers;

4. changes in the interest rate environment may have results on LCNB’s operations materially different from those anticipated by LCNB’s market risk management functions;

5. changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;

6. changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact LCNB’s operating results;

7. LCNB may experience difficulties growing loan and deposit balances;

8. the current economic environment poses significant challenges for us and could adversely affect our  financial condition and results of operations;

9. deterioration in the financial condition of the U.S. banking system may impact the valuations of investments LCNB has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments; and

10. the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the regulations promulgated and to be promulgated thereunder, which may subject LCNB and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses. 

Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist shareholders and potential investors in understanding current and anticipated financial operations of LCNB and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. LCNB undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. 

EX-99.2

Exhibit 99.2

LCNB Corp. and Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

	Three Months Ended											Six Months Ended
	6/30/2016			3/31/2016		12/31/2015		9/30/2015		6/30/2015		6/30/2016		6/30/2015
Condensed Income Statement
Interest income	$	11,008		10,621		10,812		10,409		11,348		21,629		21,438
Interest expense	883			849		906		912		748		1,732		1,510
Net interest income	10,125			9,772		9,906		9,497		10,600		19,897		19,928
Provision for loan losses	396			90		380		240		677		486		746
Net interest income after provision	9,729			9,682		9,526		9,257		9,923		19,411		19,182
Non-interest income	2,750			2,642		2,600		2,386		2,831		5,392		5,137
Non-interest expense	8,468			8,292		8,229		8,088		8,426		16,760		16,075
Income before income taxes	4,011			4,032		3,897		3,555		4,328		8,043		8,244
Provision for income taxes	1,043			1,068		1,013		922		1,205		2,111		2,287
Net income	$	2,968		2,964		2,884		2,633		3,123		5,932		5,957
Per Share Data
Dividends per share	$	0.16		0.16		0.16		0.16		0.16		0.32		0.32
Basic earnings per share	$	0.30		0.30		0.29		0.26		0.33		0.60		0.63
Diluted earnings per share	$	0.29		0.30		0.29		0.26		0.32		0.59		0.62
Book value per share	$	14.66		14.39		14.12		14.22		13.91		14.66		13.91
Tangible book value per share	$	11.17		10.88		10.58		10.66		10.33		11.17		10.33
Average basic shares outstanding	9,922,024			9,916,114		9,905,612		9,898,233		9,694,732		9,919,070		9,504,739
Average diluted shares outstanding	9,943,797			9,998,516		10,014,908		10,005,788		9,804,728		9,971,900		9,609,050
Shares outstanding at period end	9,937,262			9,931,788		9,925,547		9,903,294		9,896,904		9,937,262		9,896,904
Selected Financial Ratios
Return on average assets	0.92		%	0.93	%	0.89	%	0.82	%	1.03	%	0.92	%	1.02	%
Return on average equity	8.28		%	8.37	%	8.07	%	7.51	%	9.21	%	8.32	%	9.11	%
Dividend payout ratio	53.33		%	53.33	%	55.17	%	61.54	%	48.48	%	53.33	%	50.79	%
Net interest margin (tax equivalent)	3.55		%	3.49	%	3.46	%	3.37	%	3.95	%	3.52	%	3.89	%
Efficiency ratio (tax equivalent)	63.73		%	64.74	%	63.80	%	65.97	%	61.08	%	64.22	%	62.39	%
Selected Balance Sheet Items
Investment securities and stock	$	399,345		393,976		406,981		391,430		378,651
Loans:
Commercial and industrial	$	45,153		45,324		45,275		45,325		47,958
Commercial, secured by real estate	455,654			430,179		419,633		407,264		399,551
Residential real estate	266,625			271,812		273,139		274,054		273,249
Consumer	18,545			17,925		18,510		19,283		19,718
Agricultural	13,605			12,589		13,479		16,016		13,434
Other, including deposit overdrafts	635			643		665		676		638
Deferred net origination costs	248			242		237		215		188
Loans, gross	800,465			778,714		770,938		762,833		754,736
Less allowance for loan losses	3,373			3,150		3,129		2,958		2,879
Loans, net	$	797,092		775,564		767,809		759,875		751,857
Total assets	$	1,312,635		1,285,922		1,280,531		1,275,171		1,249,363
Total deposits	1,124,698			1,120,208		1,087,160		1,103,513		1,084,033
Short-term borrowings	30,541			11,668		37,387		14,931		12,731
Long-term debt	726			789		5,947		6,016		6,085
Total shareholders’ equity	145,710			142,933		140,108		140,851		137,698
Equity to assets ratio	11.10		%	11.12	%	10.94	%	11.05	%	11.02	%
Loans to deposit ratio	71.17		%	69.52	%	70.91	%	69.13	%	69.62	%

	Three Months Ended											Six Months Ended
	6/30/2016			3/31/2016		12/31/2015		9/30/2015		6/30/2015		6/30/2016		6/30/2015
Selected Balance Sheet Items, continued
Tangible common equity (TCE)	$	110,541		107,567		104,529		105,063		101,694
Tangible common assets (TCA)	1,277,466			1,250,556		1,244,952		1,239,383		1,213,359
TCE/TCA	8.65		%	8.60	%	8.40	%	8.48	%	8.38	%
Selected Average Balance Sheet Items
Investment securities and stock	$	396,130		389,648		406,423		385,353		360,750		392,889		337,146
Loans	$	784,324		772,204		764,440		760,159		737,021		778,264		718,592
Less allowance for loan losses	3,103			3,130		2,929		2,885		2,865		3,116		2,868
Net loans	$	781,221		769,074		761,511		757,274		734,156		775,148		715,724
Total assets	$	1,303,073		1,278,014		1,285,114		1,267,171		1,220,938		1,290,543		1,173,307
Total deposits	1,133,403			1,104,330		1,107,214		1,099,730		1,057,818		1,118,867		1,013,982
Short-term borrowings	14,355			20,710		20,290		13,450		12,803		17,532		13,310
Long-term debt	747			1,256		5,970		6,040		6,108		1,002		6,352
Total shareholders’ equity	144,185			142,447		141,751		139,032		136,003		143,316		131,829
Asset Quality
Net charge-offs	$	173		69		209		161		635
Other real estate owned	682			846		846		1,208		1,364
Non-accrual loans	2,697			3,328		1,723		2,254		1,961
Loans past due 90 days or more and still accruing	369			99		559		130		128
Total nonperforming loans	$	3,066		3,427		2,282		2,384		2,089
Net charge-offs to average loans	0.09		%	0.04	%	0.11	%	0.08	%	0.35	%
Allowance for loan losses to total loans	0.42		%	0.40	%	0.41	%	0.39	%	0.38	%
Nonperforming loans to total loans	0.38		%	0.44	%	0.30	%	0.31	%	0.28	%
Nonperforming assets to total assets	0.29		%	0.33	%	0.24	%	0.28	%	0.28	%
Assets Under Management
LCNB Corp. total assets	$	1,312,635		1,285,922		1,280,531		1,275,171		1,249,363
Trust and investments (fair value)	284,118			274,297		283,193		258,675		272,209
Mortgage loans serviced	107,189			107,992		111,837		113,610		117,204
Business cash management	8,551			6,773		7,271		6,809		6,628
Brokerage accounts (fair value)	163,596			157,713		148,956		142,151		144,186
Total assets managed	$	1,876,089		1,832,697		1,831,788		1,796,416		1,789,590
Non-GAAP Financial Measures
Accreted income on acquired loans	$	294		333		219		243		1,348		627		1,674
Amortization of acquired deposit premiums	$	0		27		34		46		211		27		397
Net income	$	2,968		2,964		2,884		2,633		3,123		5,932		5,957
Less (add) net gain (loss) on sales of securities, net of tax	183			245		108		0		146		428		219
Add merger-related expenses, net of tax	0			0		2		32		363		0		429
Core net income	$	2,785		2,719		2,778		2,665		3,340		5,504		6,167
Basic core earnings per share	$	0.28		0.27		0.28		0.27		0.34		0.55		0.65
Diluted core earnings per share	$	0.28		0.27		0.28		0.27		0.34		0.55		0.64
Adjusted return on average assets	0.86		%	0.85	%	0.86	%	0.83	%	1.10	%	0.86	%	1.06	%
Adjusted return on average equity	7.77		%	7.66	%	7.77	%	7.60	%	9.85	%	7.72	%	9.43	%
Core efficiency ratio (tax equivalent)	65.09		%	66.67	%	64.60	%	65.57	%	58.23	%	65.86	%	60.88	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	June 30, 2016 (Unaudited)			December 31, 2015
ASSETS:
Cash and due from banks	$	17,254		14,155
Interest-bearing demand deposits	1,753			832
Total cash and cash equivalents	19,007			14,987
Investment securities:
Available-for-sale, at fair value	353,528			377,978
Held-to-maturity, at cost	39,447			22,633
Federal Reserve Bank stock, at cost	2,732			2,732
Federal Home Loan Bank stock, at cost	3,638			3,638
Loans, net	797,092			767,809
Premises and equipment, net	24,985			22,100
Goodwill	30,183			30,183
Core deposit and other intangibles	4,986			5,396
Bank owned life insurance	26,921			22,561
Other assets	10,116			10,514
TOTAL ASSETS	$	1,312,635		1,280,531
LIABILITIES:
Deposits:
Noninterest-bearing	$	252,498		250,306
Interest-bearing	872,200			836,854
Total deposits	1,124,698			1,087,160
Short-term borrowings	30,541			37,387
Long-term debt	726			5,947
Accrued interest and other liabilities	10,960			9,929
TOTAL LIABILITIES	1,166,925			1,140,423
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 and12,000,000 shares at June 30, 2016 and December 31, 2015, respectively; issued 10,690,889 and 10,679,174 shares at June 30, 2016 and December 31, 2015, respectively	75,602			76,908
Retained earnings	77,384			74,629
Treasury shares at cost, 753,627 shares at June 30, 2016 and December 31, 2015	(11,665		)	(11,665	)
Accumulated other comprehensive income, net of taxes	4,389			236
TOTAL SHAREHOLDERS' EQUITY	145,710			140,108
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,312,635		1,280,531

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,
	2016		2015	2016	2015
INTEREST INCOME:
Interest and fees on loans	$	8,892	9,492	17,519	18,032
Interest on investment securities –
Taxable	1,187		1,033	2,376	1,889
Non-taxable	794		702	1,552	1,355
Other short-term investments	135		121	182	162
TOTAL INTEREST INCOME	11,008		11,348	21,629	21,438
INTEREST EXPENSE:
Interest on deposits	870		671	1,693	1,353
Interest on short-term borrowings	8		4	22	8
Interest on long-term debt	5		73	17	149
TOTAL INTEREST EXPENSE	883		748	1,732	1,510
NET INTEREST INCOME	10,125		10,600	19,897	19,928
PROVISION FOR LOAN LOSSES	396		677	486	746
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,729		9,923	19,411	19,182
NON-INTEREST INCOME:
Trust income	837		852	1,600	1,652
Service charges and fees on deposit accounts	1,243		1,234	2,436	2,341
Net gain (loss) on sales of securities	279		221	650	332
Bank owned life insurance income	191		155	360	314
Gains from sales of loans	61		219	102	254
Other operating income	139		150	244	244
TOTAL NON-INTEREST INCOME	2,750		2,831	5,392	5,137
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,532		4,381	9,095	8,671
Equipment expenses	239		302	488	590
Occupancy expense, net	588		584	1,157	1,179
State franchise tax	276		250	557	502
Marketing	201		220	368	383
Amortization of intangibles	188		175	375	321
FDIC insurance premiums	162		145	327	296
Other real estate owned	356		20	385	55
Merger-related expenses	—		522	—	592
Other non-interest expense	1,926		1,827	4,008	3,486
TOTAL NON-INTEREST EXPENSE	8,468		8,426	16,760	16,075
INCOME BEFORE INCOME TAXES	4,011		4,328	8,043	8,244
PROVISION FOR INCOME TAXES	1,043		1,205	2,111	2,287
NET INCOME	$	2,968	3,123	5,932	5,957
Dividends declared per common share	$	0.16	0.16	0.32	0.32
Earnings per common share:
Basic	0.30		0.33	0.60	0.63
Diluted	0.29		0.32	0.59	0.62
Weighted average common shares outstanding:
Basic	9,922,024		9,694,732	9,919,070	9,504,739
Diluted	9,943,797		9,804,728	9,971,900	9,609,050