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): January 26, 2017

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 January 26, 2017, LCNB Corp. issued an earnings release announcing its financial results for the fourth quarter and year ended December 31, 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 January 26, 2017, LCNB Corp. issued an earnings release announcing its financial results for the fourth quarter and year ended December 31, 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 January 26, 2017

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: January 26, 2017	By: /s/ Robert C. Haines II
		Robert C. Haines II Chief Financial Officer

EX-99.1

Exhibit 99.1

Press Release

January 26, 2017

LCNB CORP. REPORTS FINANCIAL RESULTS FOR

THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2016

LCNB Corp. (LCNB) today announced net income of $3,654,000 (total basic and diluted earnings per share of $0.37) and $12,482,000 (total basic and diluted earnings per share of $1.26 and $1.25, respectively) for the three and twelve months ended December 31, 2016, respectively.  This compares to net income of $2,884,000 (total basic and diluted earnings per share of $0.29) and $11,474,000 (total basic and diluted earnings per share of $1.18 and $1.17, respectively) for the same three and twelve-month periods in 2015. Comparisons with 2015 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 twelve months ended December 31, 2016. We had solid financial results and continued growth in our loan and deposit relationships. Return on average assets ("ROAA") was 0.96% for 2016 and return on average equity ("ROAE") was 8.60%. This compares to an ROAA of 0.94% and an ROAE of 8.43% for 2015. Comparing December 31, 2016 to December 31, 2015, loans were $48.9 million or 6.3% greater and deposits were $23.7 million or 2.2% greater. In addition, LCNB continues to invest in technological advancements, including a new mobile banking platform introduced during the second quarter of 2016. New features included the ability to make mobile deposits and mobile payments. Construction continues on our new Operations Center in downtown Lebanon, Ohio. When complete in early Spring, the new facility will provide much needed additional space as LCNB continues to grow and expand and will allow us to more efficiently meet our customers' investment and borrowing needs."

Net interest income for the three and twelve months ended December 31, 2016 increased $433,000 and $915,000, respectively, from the comparable periods in 2015, due primarily to growth in LCNB's loan portfolio and the payoff of a now high-rate $5.0 million Federal Home Loan Bank borrowing during the first quarter 2016.

The provision for loan losses for the three and twelve months ended December 31, 2016 was $325,000 and $453,000 less than the comparable periods in 2015. Net loan charge-offs for the three and twelve months ended December 31, 2016 totaled $278,000 and $467,000, respectively. This compares to net charge-offs of $209,000 and $1,358,000 for the three and twelve months ended December 31, 2015, 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 $3,466,000, from $2,282,000 or 0.30% of total loans at December 31, 2015, to $5,748,000 or 0.70% of total loans at December 31, 2016, primarily due to five loans that were newly classified as non-accrual during 2016.  Other real estate owned (which includes property acquired through foreclosure or deed-in-lieu of foreclosure) was $846,000 at December 31, 2015. LCNB did not own any such property at December 31, 2016 due to the sale of a commercial property during the fourth quarter 2016.

Non-interest income for the three and twelve months ended December 31, 2016 was $15,000 and $730,000 greater than the comparable periods in 2015, respectively. Non-interest income for the full year was greater primarily due to a $587,000 increase in gains from sales of investment securities, reflecting a higher volume of securities sales, and to a $121,000 increase in bank owned life insurance income, reflecting $4.0 million of new policies purchased during the first quarter 2016.

Non-interest expense for the three months ended December 31, 2016 was $321,000 less than the comparable period in 2015 primarily due to a $229,000 decrease in other real estate owned expense, a $104,000 decrease on salaries and employee benefits, and a $114,000 decrease in FDIC insurance premiums. Other real estate owned expense decreased due to the absence during the 2016 period of writedowns recognized during the fourth quarter 2015. Salaries and employee benefits decreased largely due to a decrease in pension expense. FDIC insurance premiums decreased due to a reduction in assessment levels resulting from the Reserve Ratio reaching 1.15% effective June 30, 2016. The Reserve Ratio is the total of the Deposit Insurance Fund divided by the total estimated insured deposits of the industry.

Non-interest expense for the year ended December 31, 2016 was $869,000 greater than the comparable period in 2015 primarily due to a $622,000 increase in salaries and employee benefits, a $251,000 penalty incurred to pre-pay the high-rate Federal Home Loan Bank borrowing mentioned above, a $135,000 increase in other real estate owned expense, and a $191,000 increase in various contracted services. 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. The FHLB advance had an interest rate of 5.25% and was paid off to reduce interest expense on long-term debt. Other real estate owned expense increased primarily due to writedowns recognized prior to the sale of the commercial property mentioned above. 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											Twelve Months Ended
	12/31/2016			9/30/2016		6/30/2016		3/31/2016		12/31/2015		12/31/2016		12/31/2015
Condensed Income Statement
Interest income	$	11,226		10,895		11,008		10,621		10,812		43,750		42,659
Interest expense	887			885		883		849		906		3,504		3,328
Net interest income	10,339			10,010		10,125		9,772		9,906		40,246		39,331
Provision for loan losses	55			372		396		90		380		913		1,366
Net interest income after provision	10,284			9,638		9,729		9,682		9,526		39,333		37,965
Non-interest income	2,615			2,846		2,750		2,642		2,600		10,853		10,123
Non-interest expense	7,908			8,593		8,468		8,292		8,229		33,261		32,392
Income before income taxes	4,991			3,891		4,011		4,032		3,897		16,925		15,696
Provision for income taxes	1,337			995		1,043		1,068		1,013		4,443		4,222
Net income	$	3,654		2,896		2,968		2,964		2,884		12,482		11,474
Accreted income on acquired loans	$	495		223		304		343		292		1,365		2,227
Amortization of acquired deposit premiums	$	0		0		0		27		34		27		477
Tax-equivalent net interest income	$	10,772		10,432		10,538		10,166		10,298		41,908		40,798
Per Share Data
Dividends per share	$	0.16		0.16		0.16		0.16		0.16		0.64		0.64
Basic earnings per share	$	0.37		0.29		0.30		0.30		0.29		1.26		1.18
Diluted earnings per share	$	0.37		0.29		0.29		0.30		0.29		1.25		1.17
Book value per share	$	14.30		14.70		14.66		14.39		14.12		14.30		14.12
Tangible book value per share	$	10.86		11.24		11.17		10.88		10.58		10.86		10.58
Average basic shares outstanding	9,984,344			9,962,571		9,922,024		9,916,114		9,905,612		9,943,795		9,704,965
Average diluted shares outstanding	9,997,565			9,977,592		9,943,797		9,998,516		10,014,908		9,981,872		9,811,476
Shares outstanding at period end	9,998,025			9,993,695		9,937,262		9,931,788		9,925,547		9,998,025		9,925,547
Selected Financial Ratios
Return on average assets	1.10		%	0.87	%	0.92	%	0.93	%	0.89	%	0.96	%	0.94	%
Return on average equity	9.91		%	7.82	%	8.28	%	8.37	%	8.07	%	8.60	%	8.43	%
Dividend payout ratio	43.24		%	55.17	%	53.33	%	53.33	%	55.17	%	50.79	%	54.24	%
Net interest margin (tax equivalent)	3.56		%	3.42	%	3.55	%	3.49	%	3.46	%	3.51	%	3.64	%
Efficiency ratio (tax equivalent)	59.07		%	64.71	%	63.73	%	64.74	%	63.80	%	63.04	%	63.61	%
Selected Balance Sheet Items
Investment securities and stock	$	368,032		394,798		399,345		393,976		406,981
Loans:
Commercial and industrial	$	41,878		40,097		45,153		45,324		45,275
Commercial, secured by real estate	477,275			467,512		455,654		430,179		419,633
Residential real estate	265,788			268,574		266,625		271,812		273,139
Consumer	19,173			18,752		18,545		17,925		18,510
Agricultural	14,802			15,872		13,605		12,589		13,479
Other, including deposit overdrafts	633			619		635		643		665
Deferred net origination costs	254			236		248		242		237
Loans, gross	819,803			811,662		800,465		778,714		770,938
Less allowance for loan losses	3,575			3,798		3,373		3,150		3,129
Loans, net	$	816,228		807,864		797,092		775,564		767,809
Total earning assets	$	1,188,322		1,222,614		1,201,563		1,180,719		1,178,750
Total assets	1,306,799			1,333,536		1,312,635		1,285,922		1,280,531
Total deposits	1,110,905			1,158,921		1,124,698		1,120,208		1,087,160
Short-term borrowings	42,040			16,989		30,541		11,668		37,387
Long-term debt	598			662		726		789		5,947

	Three Months Ended											Twelve Months Ended
	12/31/2016			9/30/2016		6/30/2016		3/31/2016		12/31/2015		12/31/2016		12/31/2015
Selected Balance Sheet Items, continued
Total shareholders’ equity	142,944			146,906		145,710		142,933		140,108
Equity to assets ratio	10.94		%	11.02	%	11.10	%	11.12	%	10.94	%
Loans to deposits ratio	73.80		%	70.04	%	71.17	%	69.52	%	70.91	%
Tangible common equity (TCE)	$	108,178		111,946		110,541		107,567		104,529
Tangible common assets (TCA)	1,272,033			1,298,576		1,277,466		1,250,556		1,244,952
TCE/TCA	8.50		%	8.62	%	8.65	%	8.60	%	8.40	%
Selected Average Balance Sheet Items
Investment securities and stock	$	380,138		396,620		396,130		389,648		406,423		390,621		366,758
Loans	$	812,537		800,729		784,324		772,204		764,440		792,526		740,626
Less allowance for loan losses	3,654			3,382		3,103		3,130		2,929		3,318		2,888
Net loans	$	808,883		797,347		781,221		769,074		761,511		789,208		737,738
Total earning assets	$	1,204,360		1,212,232		1,193,585		1,171,709		1,181,594		1,195,541		1,120,081
Total assets	1,316,037			1,323,532		1,303,073		1,278,014		1,285,114		1,305,132		1,225,112
Total deposits	1,138,740			1,147,981		1,133,403		1,104,330		1,107,214		1,131,179		1,059,095
Short-term borrowings	20,406			16,328		14,355		20,710		20,290		17,952		15,105
Long-term debt	620			684		747		1,256		5,970		826		6,177
Total shareholders’ equity	146,602			147,371		144,185		142,447		141,751		145,161		136,145
Equity to assets ratio	11.14		%	11.13	%	11.06	%	11.15	%	11.03	%	11.12	%	11.11	%
Loans to deposits ratio	71.35		%	69.75	%	69.20	%	69.93	%	69.04	%	70.06	%	69.93	%
Asset Quality
Net charge-offs	$	278		(53	)	173		69		209
Other real estate owned	0			270		682		846		846
Non-accrual loans	5,725			4,619		2,697		3,328		1,723
Loans past due 90 days or more and still accruing	23			20		369		99		559
Total nonperforming loans	$	5,748		4,639		3,066		3,427		2,282
Net charge-offs to average loans	0.14		%	(0.03	)%	0.09	%	0.04	%	0.11	%
Allowance for loan losses to total loans	0.44		%	0.47	%	0.42	%	0.40	%	0.41	%
Nonperforming loans to total loans	0.70		%	0.57	%	0.38	%	0.44	%	0.30	%
Nonperforming assets to total assets	0.44		%	0.37	%	0.29	%	0.33	%	0.24	%
Assets Under Management
LCNB Corp. total assets	$	1,306,799		1,333,536		1,312,635		1,285,922		1,280,531
Trust and investments (fair value)	303,534			293,808		284,118		274,297		283,193
Mortgage loans serviced	100,982			105,018		107,189		107,992		111,837
Business cash management	9,058			7,647		8,551		6,773		7,271
Brokerage accounts (fair value)	188,663			179,244		163,596		157,713		148,956
Total assets managed	$	1,909,036		1,919,253		1,876,089		1,832,697		1,831,788
Non-GAAP Financial Measures
Net income	$	3,654		2,896		2,968		2,964		2,884		12,482		11,474
Less (add) net gain (loss) on sales of securities, net of tax	82			202		183		245		108		712		327
Add merger-related expenses, net of tax	0			0		0		0		2		0		463
Core net income	$	3,572		2,694		2,785		2,719		2,778		11,770		11,610
Basic core earnings per share	$	0.36		0.27		0.28		0.27		0.28		1.18		1.20
Diluted core earnings per share	$	0.36		0.27		0.28		0.27		0.28		1.18		1.18
Adjusted return on average assets	1.08		%	0.81	%	0.86	%	0.85	%	0.86	%	0.90	%	0.95	%
Adjusted return on average equity	9.69		%	7.27	%	7.77	%	7.66	%	7.77	%	8.11	%	8.53	%
Core efficiency ratio (tax equivalent)	59.57		%	66.24	%	65.09	%	66.67	%	64.60	%	64.34	%	62.96	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	December 31, 2016 (Unaudited)			December 31, 2015
ASSETS:
Cash and due from banks	$	18,378		14,155
Interest-bearing demand deposits	487			832
Total cash and cash equivalents	18,865			14,987
Investment securities:
Available-for-sale, at fair value	320,659			377,978
Held-to-maturity, at cost	41,003			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	816,228			767,809
Premises and equipment, net	30,244			22,100
Goodwill	30,183			30,183
Core deposit and other intangibles	4,582			5,396
Bank owned life insurance	27,307			22,561
Other assets	11,358			10,514
TOTAL ASSETS	$	1,306,799		1,280,531
LIABILITIES:
Deposits:
Noninterest-bearing	$	271,332		250,306
Interest-bearing	839,573			836,854
Total deposits	1,110,905			1,087,160
Short-term borrowings	42,040			37,387
Long-term debt	598			5,947
Accrued interest and other liabilities	10,312			9,929
TOTAL LIABILITIES	1,163,855			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 and 12,000,000 shares at December 31, 2016 and December 31, 2015, respectively; issued 10,751,652 and 10,679,174 shares at December 31, 2016 and December 31, 2015, respectively	76,490			76,908
Retained earnings	80,736			74,629
Treasury shares at cost, 753,627 shares at December 31, 2016 and December 31, 2015	(11,665		)	(11,665	)
Accumulated other comprehensive income, net of taxes	(2,617		)	236
TOTAL SHAREHOLDERS' EQUITY	142,944			140,108
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,306,799		1,280,531

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended   December 31,			Twelve Months Ended   December 31,
	2016		2015	2016	2015
INTEREST INCOME:
Interest and fees on loans	$	9,205	8,713	35,600	35,285
Interest on investment securities –
Taxable	1,054		1,214	4,582	4,197
Non-taxable	834		761	3,199	2,848
Other short-term investments	133		124	369	329
TOTAL INTEREST INCOME	11,226		10,812	43,750	42,659
INTEREST EXPENSE:
Interest on deposits	875		822	3,440	3,009
Interest on short-term borrowings	8		11	38	24
Interest on long-term debt	4		73	26	295
TOTAL INTEREST EXPENSE	887		906	3,504	3,328
NET INTEREST INCOME	10,339		9,906	40,246	39,331
PROVISION FOR LOAN LOSSES	55		380	913	1,366
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	10,284		9,526	39,333	37,965
NON-INTEREST INCOME:
Trust income	815		856	3,286	3,262
Service charges and fees on deposit accounts	1,296		1,265	5,008	4,920
Net gain (loss) on sales of securities	125		163	1,082	495
Bank owned life insurance income	193		155	746	625
Gains from sales of loans	69		55	244	343
Other operating income	117		106	487	478
TOTAL NON-INTEREST INCOME	2,615		2,600	10,853	10,123
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,478		4,582	18,215	17,593
Equipment expenses	281		343	1,048	1,257
Occupancy expense, net	564		558	2,271	2,307
State franchise tax	278		248	1,114	1,001
Marketing	166		161	696	720
Amortization of intangibles	189		190	753	700
FDIC insurance premiums	52		166	547	598
Contracted services	283		213	1,033	842
Other real estate owned	17		246	624	489
Merger-related expenses	—		2	—	643
Other non-interest expense	1,600		1,520	6,960	6,242
TOTAL NON-INTEREST EXPENSE	7,908		8,229	33,261	32,392
INCOME BEFORE INCOME TAXES	4,991		3,897	16,925	15,696
PROVISION FOR INCOME TAXES	1,337		1,013	4,443	4,222
NET INCOME	$	3,654	2,884	12,482	11,474
Dividends declared per common share	$	0.16	0.16	0.64	0.64
Earnings per common share:
Basic	0.37		0.29	1.26	1.18
Diluted	0.37		0.29	1.25	1.17
Weighted average common shares outstanding:
Basic	9,984,344		9,905,612	9,943,795	9,704,965
Diluted	9,997,565		10,014,908	9,981,872	9,811,476