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): October 18, 2016

LCNB CORP.

(Exact name of Registrant as specified in its Charter)

Ohio	001-35292	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 October 18, 2016, LCNB Corp. issued an earnings release announcing its financial results for the third quarter ended September 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 October 18, 2016, LCNB Corp. issued an earnings release announcing its financial results for the third quarter ended September 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 October 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: October 18, 2016	By: /s/ Robert C. Haines II
		Robert C. Haines II Chief Financial Officer

EX-99.1

Exhibit 99.1

Press Release

October 18, 2016

LCNB CORP. REPORTS FINANCIAL RESULTS FOR

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016

LCNB Corp. (LCNB) today announced net income of $2,896,000 (total basic and diluted earnings per share of $0.29) and $8,828,000 (total basic and diluted earnings per share of $0.89 and $0.88, respectively) for the three and nine months ended September 30, 2016, respectively.  This compares to net income of $2,633,000 (total basic and diluted earnings per share of $0.26) and $8,590,000 (total basic and diluted earnings per share of $0.89 and $0.88, respectively) for the same three and nine-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 nine months ended September 30, 2016. Net income for the three and nine-month periods of 2016 was $263,000 and $238,000 greater than the comparable periods in 2015, respectively, despite several one-time charges that were recognized during 2016. The first of which was a $251,000 penalty incurred during the first quarter for the early payoff a now high-rate Federal Home Loan Bank ("FHLB") borrowing, which will decrease future interest expense. The second was write-downs totaling $576,000 recognized during the second and third quarters for a commercial other real estate owned property. Organic loan growth during the nine-month period in 2016 was $40.7 million, which significantly contributed to increases in net interest income of $513,000 and $482,000 for the three and nine months ended September 30, 2016, respectively, as compared to the same periods in 2015."

The provision for loan losses for the three months ended September 30, 2016 was $132,000 greater than the comparable period in 2015. The provision for the nine-month period of 2016 was $128,000 less than the comparable period in 2015. Net loan charge-offs for the nine months ended September 30, 2016 and 2015 totaled $189,000 and $1,148,000, 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 $2,357,000, from $2,282,000 or 0.30% of total loans at December 31, 2015, to $4,639,000 or 0.57% of total loans at September 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 and two loans to same borrower totaling $1,217,000 that were newly classified as non-accrual during the third 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 $270,000 at September 30, 2016 due to write-downs totaling $576,000 recognized on commercial property.

Non-interest income for the three and nine months ended September 30, 2016 was $460,000 and $715,000 greater than the comparable periods in 2015, respectively, primarily due to increases in gains from sales of investment securities, reflecting a higher volume of securities sales.

Non-interest expense for the three and nine months ended September 30, 2016 was $505,000 and $1,190,000 greater than the comparable periods in 2015, respectively. The increase for the quarter was largely due to increases in salaries and employee benefits. The increase for the nine-month period was primarily due to increases in salaries and employee benefits, increases in other real estate owned expenses, and a $251,000 penalty for the early payoff of a $5 million 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. These increases were partially offset by the absence of merger-related expenses during the 2016 period.

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											Nine Months Ended
	9/30/2016			6/30/2016		3/31/2016		12/31/2015		9/30/2015		9/30/2016		9/30/2015
Condensed Income Statement
Interest income	$	10,895		11,008		10,621		10,812		10,409		32,524		31,847
Interest expense	885			883		849		906		912		2,617		2,422
Net interest income	10,010			10,125		9,772		9,906		9,497		29,907		29,425
Provision for loan losses	372			396		90		380		240		858		986
Net interest income after provision	9,638			9,729		9,682		9,526		9,257		29,049		28,439
Non-interest income	2,846			2,750		2,642		2,600		2,386		8,238		7,523
Non-interest expense	8,593			8,468		8,292		8,229		8,088		25,353		24,163
Income before income taxes	3,891			4,011		4,032		3,897		3,555		11,934		11,799
Provision for income taxes	995			1,043		1,068		1,013		922		3,106		3,209
Net income	$	2,896		2,968		2,964		2,884		2,633		8,828		8,590
Accreted income on acquired loans	$	223		304		343		292		255		870		1,934
Amortization of acquired deposit premiums	$	0		0		27		34		46		27		443
Tax-equivalent net interest income	$	10,432		10,538		10,166		10,298		9,874		31,136		30,500
Per Share Data
Dividends per share	$	0.16		0.16		0.16		0.16		0.16		0.48		0.48
Basic earnings per share	$	0.29		0.30		0.30		0.29		0.26		0.89		0.89
Diluted earnings per share	$	0.29		0.29		0.30		0.29		0.26		0.88		0.88
Book value per share	$	14.70		14.66		14.39		14.12		14.22		14.70		14.22
Tangible book value per share	$	11.24		11.17		10.88		10.58		10.66		11.24		10.66
Average basic shares outstanding	9,962,571			9,922,024		9,916,114		9,905,612		9,898,233		9,930,182		9,637,344
Average diluted shares outstanding	9,977,592			9,943,797		9,998,516		10,014,908		10,005,788		9,974,319		9,742,839
Shares outstanding at period end	9,993,695			9,937,262		9,931,788		9,925,547		9,903,294		9,993,695		9,903,294
Selected Financial Ratios
Return on average assets	0.87		%	0.92	%	0.93	%	0.89	%	0.82	%	0.91	%	0.95	%
Return on average equity	7.82		%	8.28	%	8.37	%	8.07	%	7.51	%	8.15	%	8.55	%
Dividend payout ratio	55.17		%	53.33	%	53.33	%	55.17	%	61.54	%	53.93	%	53.93	%
Net interest margin (tax equivalent)	3.42		%	3.55	%	3.49	%	3.46	%	3.37	%	3.49	%	3.71	%
Efficiency ratio (tax equivalent)	64.71		%	63.73	%	64.74	%	63.80	%	65.97	%	64.39	%	63.55	%
Selected Balance Sheet Items
Investment securities and stock	$	394,798		399,345		393,976		406,981		391,430
Loans:
Commercial and industrial	$	40,097		45,153		45,324		45,275		45,325
Commercial, secured by real estate	467,512			455,654		430,179		419,633		407,264
Residential real estate	268,574			266,625		271,812		273,139		274,054
Consumer	18,752			18,545		17,925		18,510		19,283
Agricultural	15,872			13,605		12,589		13,479		16,016
Other, including deposit overdrafts	619			635		643		665		676
Deferred net origination costs	236			248		242		237		215
Loans, gross	811,662			800,465		778,714		770,938		762,833
Less allowance for loan losses	3,798			3,373		3,150		3,129		2,958
Loans, net	$	807,864		797,092		775,564		767,809		759,875
Total earning assets	$	1,222,614		1,201,563		1,180,719		1,178,750		1,168,629
Total assets	1,333,536			1,312,635		1,285,922		1,280,531		1,275,171
Total deposits	1,158,921			1,124,698		1,120,208		1,087,160		1,103,513
Short-term borrowings	16,989			30,541		11,668		37,387		14,931
Long-term debt	662			726		789		5,947		6,016

	Three Months Ended											Six Months Ended
	9/30/2016			6/30/2016		3/31/2016		12/31/2015		9/30/2015		9/30/2016		9/30/2015
Selected Balance Sheet Items, continued
Total shareholders’ equity	146,906			145,710		142,933		140,108		140,851
Equity to assets ratio	11.02		%	11.10	%	11.12	%	10.94	%	11.05	%
Loans to deposits ratio	70.04		%	71.17	%	69.52	%	70.91	%	69.13	%
Tangible common equity (TCE)	$	111,946		110,541		107,567		104,529		105,063
Tangible common assets (TCA)	1,298,576			1,277,466		1,250,556		1,244,952		1,239,383
TCE/TCA	8.62		%	8.65	%	8.60	%	8.40	%	8.48	%
Selected Average Balance Sheet Items
Investment securities and stock	$	396,620		396,130		389,648		406,423		385,353		394,141		353,391
Loans	$	800,729		784,324		772,204		764,440		760,159		785,807		732,600
Less allowance for loan losses	3,382			3,103		3,130		2,929		2,885		3,206		2,873
Net loans	$	797,347		781,221		769,074		761,511		757,274		782,601		729,727
Total earning assets	$	1,212,232		1,193,585		1,171,709		1,181,594		1,160,768		1,192,580		1,099,351
Total assets	1,323,532			1,303,073		1,278,014		1,285,114		1,267,171		1,301,620		1,204,909
Total deposits	1,147,981			1,133,403		1,104,330		1,107,214		1,099,730		1,128,642		1,042,879
Short-term borrowings	16,328			14,355		20,710		20,290		13,450		17,128		13,358
Long-term debt	684			747		1,256		5,970		6,040		895		6,247
Total shareholders’ equity	147,371			144,185		142,447		141,751		139,032		144,678		134,256
Equity to assets ratio	11.13		%	11.06	%	11.15	%	11.03	%	10.97	%	11.12	%	11.14	%
Loans to deposits ratio	69.75		%	69.20	%	69.93	%	69.04	%	69.12	%	69.62	%	70.25	%
Asset Quality
Net charge-offs	$	(53	)	173		69		209		161
Other real estate owned	270			682		846		846		1,208
Non-accrual loans	4,619			2,697		3,328		1,723		2,254
Loans past due 90 days or more and still accruing	20			369		99		559		130
Total nonperforming loans	$	4,639		3,066		3,427		2,282		2,384
Net charge-offs to average loans	(0.03		)%	0.09	%	0.04	%	0.11	%	0.08	%
Allowance for loan losses to total loans	0.47		%	0.42	%	0.40	%	0.41	%	0.39	%
Nonperforming loans to total loans	0.57		%	0.38	%	0.44	%	0.30	%	0.31	%
Nonperforming assets to total assets	0.37		%	0.29	%	0.33	%	0.24	%	0.28	%
Assets Under Management
LCNB Corp. total assets	$	1,333,536		1,312,635		1,285,922		1,280,531		1,275,171
Trust and investments (fair value)	293,808			284,118		274,297		283,193		258,675
Mortgage loans serviced	105,018			107,189		107,992		111,837		113,610
Business cash management	7,647			8,551		6,773		7,271		6,809
Brokerage accounts (fair value)	179,244			163,596		157,713		148,956		142,151
Total assets managed	$	1,919,253		1,876,089		1,832,697		1,831,788		1,796,416
Non-GAAP Financial Measures
Net income	$	2,896		2,968		2,964		2,884		2,633		8,828		8,590
Less (add) net gain (loss) on sales of securities, net of tax	202			183		245		108		0		630		219
Add merger-related expenses, net of tax	0			0		0		2		32		0		461
Core net income	$	2,694		2,785		2,719		2,778		2,665		8,198		8,832
Basic core earnings per share	$	0.27		0.28		0.27		0.28		0.27		0.83		0.92
Diluted core earnings per share	$	0.27		0.28		0.27		0.28		0.27		0.82		0.91
Adjusted return on average assets	0.81		%	0.86	%	0.85	%	0.86	%	0.83	%	0.84	%	0.98	%
Adjusted return on average equity	7.27		%	7.77	%	7.66	%	7.77	%	7.60	%	7.57	%	8.80	%
Core efficiency ratio (tax equivalent)	66.24		%	65.09	%	66.67	%	64.60	%	65.57	%	65.99	%	62.41	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	September 30, 2016 (Unaudited)			December 31, 2015
ASSETS:
Cash and due from banks	$	17,059		14,155
Interest-bearing demand deposits	16,154			832
Total cash and cash equivalents	33,213			14,987
Investment securities:
Available-for-sale, at fair value	346,391			377,978
Held-to-maturity, at cost	42,037			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	807,864			767,809
Premises and equipment, net	26,347			22,100
Goodwill	30,183			30,183
Core deposit and other intangibles	4,777			5,396
Bank owned life insurance	27,114			22,561
Other assets	9,240			10,514
TOTAL ASSETS	$	1,333,536		1,280,531
LIABILITIES:
Deposits:
Noninterest-bearing	$	259,043		250,306
Interest-bearing	899,878			836,854
Total deposits	1,158,921			1,087,160
Short-term borrowings	16,989			37,387
Long-term debt	662			5,947
Accrued interest and other liabilities	10,058			9,929
TOTAL LIABILITIES	1,186,630			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 September 30, 2016 and December 31, 2015, respectively; issued 10,747,322 and 10,679,174 shares at September 30, 2016 and December 31, 2015, respectively	76,367			76,908
Retained earnings	78,682			74,629
Treasury shares at cost, 753,627 shares at September 30, 2016 and December 31, 2015	(11,665		)	(11,665	)
Accumulated other comprehensive income, net of taxes	3,522			236
TOTAL SHAREHOLDERS' EQUITY	146,906			140,108
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,333,536		1,280,531

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended   September 30,			Nine Months Ended   September 30,
	2016		2015	2016	2015
INTEREST INCOME:
Interest and fees on loans	$	8,876	8,540	26,395	26,572
Interest on investment securities –
Taxable	1,152		1,094	3,528	2,983
Non-taxable	813		732	2,365	2,087
Other short-term investments	54		43	236	205
TOTAL INTEREST INCOME	10,895		10,409	32,524	31,847
INTEREST EXPENSE:
Interest on deposits	872		834	2,565	2,187
Interest on short-term borrowings	8		5	30	13
Interest on long-term debt	5		73	22	222
TOTAL INTEREST EXPENSE	885		912	2,617	2,422
NET INTEREST INCOME	10,010		9,497	29,907	29,425
PROVISION FOR LOAN LOSSES	372		240	858	986
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,638		9,257	29,049	28,439
NON-INTEREST INCOME:
Trust income	871		754	2,471	2,406
Service charges and fees on deposit accounts	1,276		1,314	3,712	3,655
Net gain (loss) on sales of securities	307		—	957	332
Bank owned life insurance income	193		156	553	470
Gains from sales of loans	73		34	175	288
Other operating income	126		128	370	372
TOTAL NON-INTEREST INCOME	2,846		2,386	8,238	7,523
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,642		4,340	13,737	13,011
Equipment expenses	279		324	767	914
Occupancy expense, net	550		570	1,707	1,749
State franchise tax	279		251	836	753
Marketing	162		176	530	559
Amortization of intangibles	189		189	564	510
FDIC insurance premiums	168		136	495	432
Other real estate owned	222		188	607	243
Merger-related expenses	—		49	—	641
Other non-interest expense	2,102		1,865	6,110	5,351
TOTAL NON-INTEREST EXPENSE	8,593		8,088	25,353	24,163
INCOME BEFORE INCOME TAXES	3,891		3,555	11,934	11,799
PROVISION FOR INCOME TAXES	995		922	3,106	3,209
NET INCOME	$	2,896	2,633	8,828	8,590
Dividends declared per common share	$	0.16	0.16	0.48	0.48
Earnings per common share:
Basic	0.29		0.26	0.89	0.89
Diluted	0.29		0.26	0.88	0.88
Weighted average common shares outstanding:
Basic	9,962,571		9,898,233	9,930,182	9,637,344
Diluted	9,977,592		10,005,788	9,974,319	9,742,839