EX-99.2 3 lcnb-x8xkexhibit9922016qr2.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
 
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