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, 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On October 18, 2017, LCNB Corp. issued an earnings release announcing its financial results for the third quarter ended September 30, 2017. 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, 2017, LCNB Corp. issued an earnings release announcing its financial results for the third quarter ended September 30, 2017. 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, 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: October 18, 2017	By: /s/ Robert C. Haines II
		Robert C. Haines II Chief Financial Officer

EX-99.1

Exhibit 99.1

Press Release

October 18, 2017

LCNB CORP. REPORTS FINANCIAL RESULTS FOR

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017

LCNB Corp. (LCNB) (NASDAQ: LCNB) today announced net income of $3,106,000 (total basic and diluted earnings per share of $0.31) and $9,355,000 (total basic and diluted earnings per share of $0.93) for the three and nine months ended September 30, 2017.  This compares to 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 same three and nine-month periods in 2016.

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, 2017. Our financial results were solid and we experienced continued growth in our loan and deposit relationships. Comparing September 30, 2017 to December 31, 2016, net loans increased $14.6 million or 1.8% and total deposits increased $10.6 million or 1.0%. Return on average assets for the nine months ended September 30, 2017 was 0.95% compared to 0.91% for the first nine months of 2016. Return on average equity for the nine months ended September 30, 2017 was 8.48% compared to 8.15% for the same period in 2016."

Net interest income for the three months and nine months ended September 30, 2017 was respectively $137,000 and $300,000 greater than the comparable periods in 2016, primarily due to growth in LCNB's loan portfolio, partially offset by a decrease in the average rate earned on the portfolio.

The provision for loan losses for the three and nine months ended September 30, 2017 was respectively $384,000 and $633,000 less than the comparable periods in 2016. Non-accrual loans and loans past due 90 days or more and still accruing interest decreased $1,266,000, from $5,748,000 or 0.70% of total loans at December 31, 2016, to $4,482,000 or 0.54% of total loans at September 30, 2017.

Non-interest income for the three and nine months ended September 30, 2017 was respectively $187,000 and $359,000 less than the comparable periods in 2016, primarily due to decreases in gains from the sale of investment securities. Net gains for the three and nine-month periods were respectively $229,000 and $739,000 less than the comparable 2016 periods primarily due to a decrease in the volume of securities sold.

Non-interest expense for the three months ended September 30, 2017 was $79,000 greater than the comparable period in 2016 primarily due to increases in equipment, occupancy, and marketing expense. These three items increased a total of $337,000, partially offset by a $219,000 decrease in other real estate owned expenses. Equipment and occupancy expenses increased largely due to additional depreciation expense from the new operations center, along with additional utilities and maintenance costs. Marketing expense increased due to the expanded use of television and digital advertising. Other real estate owned expenses decreased because the amount of other real estate owned property held during 2017 was significantly less than the amount of property held during 2016.

Non-interest expense for the nine months ended September 30, 2017 was $102,000 less than the comparable period in 2016, primarily due to a $599,000 decrease in other real estate owned expenses and to the absence of a $251,000 penalty incurred during the first quarter 2016 to pre-pay a Federal Home Loan Bank borrowing bearing an interest rate of 5.25%. The borrowing was paid off to reduce future interest expense on long-term debt. These decreases were partially offset by the increases previously mentioned and by increased salaries and employee benefits on a nine-month basis.

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. A commercial loan office is located in Franklin County, 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
	9/30/2017			6/30/2017		3/31/2017		12/31/2016		9/30/2016		9/30/2017		9/30/2016
Condensed Income Statement
Interest income	$	11,055		10,934		10,864		11,226		10,895		32,853		32,524
Interest expense	908			861		877		887		885		2,646		2,617
Net interest income	10,147			10,073		9,987		10,339		10,010		30,207		29,907
Provision for loan losses	(12		)	222		15		55		372		225		858
Net interest income after provision	10,159			9,851		9,972		10,284		9,638		29,982		29,049
Non-interest income	2,659			2,790		2,430		2,615		2,846		7,879		8,238
Non-interest expense	8,672			8,611		7,968		7,908		8,593		25,251		25,353
Income before income taxes	4,146			4,030		4,434		4,991		3,891		12,610		11,934
Provision for income taxes	1,040			1,027		1,188		1,337		995		3,255		3,106
Net income	$	3,106		3,003		3,246		3,654		2,896		9,355		8,828
Accreted income on acquired loans	$	90		180		220		495		223		490		870
Tax-equivalent net interest income	$	10,569		10,494		10,410		10,772		10,432		31,487		31,136
Per Share Data
Dividends per share	$	0.16		0.16		0.16		0.16		0.16		0.48		0.48
Basic earnings per common share	$	0.31		0.30		0.32		0.37		0.29		0.93		0.89
Diluted earnings per common share	$	0.31		0.30		0.32		0.37		0.29		0.93		0.88
Book value per share	$	14.94		14.77		14.52		14.30		14.70		14.94		14.70
Tangible book value per share	$	11.57		11.38		11.11		10.86		11.24		11.57		11.24
Average basic common shares outstanding	10,008,807			10,004,422		9,995,054		9,984,344		9,962,571		10,002,812		9,930,182
Average diluted common shares outstanding	10,015,204			10,011,312		10,002,878		9,997,565		9,977,592		10,009,942		9,974,319
Shares outstanding at period end	10,018,507			10,014,004		10,009,642		9,998,025		9,993,695		10,018,507		9,993,695
Selected Financial Ratios
Return on average assets	0.94		%	0.91	%	1.01	%	1.10	%	0.87	%	0.95	%	0.91	%
Return on average equity	8.22		%	8.15	%	9.10	%	9.91	%	7.82	%	8.48	%	8.15	%
Dividend payout ratio	51.61		%	53.33	%	50.00	%	43.24	%	55.17	%	51.61	%	53.93	%
Net interest margin (tax equivalent)	3.52		%	3.50	%	3.55	%	3.56	%	3.42	%	3.53	%	3.49	%
Efficiency ratio (tax equivalent)	65.56		%	64.82	%	62.06	%	59.07	%	64.71	%	64.14	%	64.39	%
Selected Balance Sheet Items
Cash and cash equivalents	$	21,203		29,967		33,274		18,865		33,213
Investment securities and stock	353,634			373,595		371,501		368,032		394,798
Loans:
Commercial and industrial	$	36,049		38,651		40,039		41,878		40,097
Commercial, secured by real estate	510,158			495,255		475,594		477,275		467,512
Residential real estate	253,530			258,710		260,853		265,788		268,574
Consumer	17,956			17,475		17,646		19,173		18,752
Agricultural	15,677			16,014		15,459		14,802		15,872
Other, including deposit overdrafts	570			547		609		633		619
Deferred net origination costs	264			281		281		254		236
Loans, gross	834,204			826,933		810,481		819,803		811,662
Less allowance for loan losses	3,407			3,382		3,328		3,575		3,798
Loans, net	$	830,797		823,551		807,153		816,228		807,864

	Three Months Ended											Nine Months Ended
	9/30/2017			6/30/2017		3/31/2017		12/31/2016		9/30/2016		9/30/2017		9/30/2016
Selected Balance Sheet Items, continued
Total earning assets	$	1,193,648		1,211,096		1,200,544		1,188,322		1,222,614
Total assets	1,314,319			1,335,571		1,319,074		1,306,799		1,333,536
Total deposits	1,121,523			1,143,920		1,148,198		1,110,905		1,158,921
Short-term borrowings	30,000			31,712		15,957		42,040		16,989
Long-term debt	363			402		480		598		662
Total shareholders’ equity	149,713			147,927		145,318		142,944		146,906
Equity to assets ratio	11.39		%	11.08	%	11.02	%	10.94	%	11.02	%
Loans to deposits ratio	74.38		%	72.29	%	70.59	%	73.80	%	70.04	%
Tangible common equity (TCE)	$	115,527		113,542		110,745		108,178		111,946
Tangible common assets (TCA)	1,280,133			1,301,186		1,284,501		1,272,033		1,298,576
TCE/TCA	9.02		%	8.73	%	8.62	%	8.50	%	8.62	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	21,609		33,639		26,672		28,422		32,011		27,289		29,656
Investment securities and stock	363,039			373,295		366,499		380,138		396,620		367,598		394,141
Loans	$	824,183		811,186		813,597		812,537		800,729		816,361		785,807
Less allowance for loan losses	3,324			3,334		3,557		3,654		3,382		3,404		3,206
Net loans	$	820,859		807,852		810,040		808,883		797,347		812,957		782,601
Total earning assets	$	1,190,860		1,202,129		1,188,383		1,204,360		1,212,232		1,193,800		1,192,580
Total assets	1,313,476			1,321,442		1,308,591		1,316,037		1,323,532		1,314,476		1,301,620
Total deposits	1,133,072			1,148,206		1,125,457		1,138,740		1,147,981		1,135,605		1,128,642
Short-term borrowings	17,936			15,030		28,500		20,406		16,328		20,450		17,128
Long-term debt	383			441		537		620		684		453		895
Total shareholders’ equity	150,032			147,826		144,672		146,602		147,371		147,530		144,678
Equity to assets ratio	11.42		%	11.19	%	11.06	%	11.14	%	11.13	%	11.22	%	11.12	%
Loans to deposits ratio	72.74		%	70.65	%	72.29	%	71.35	%	69.75	%	71.89	%	69.62	%
Asset Quality
Net charge-offs (recoveries)	$	(36	)	168		262		278		(53	)	394		189
Other real estate owned	0			0		0		0		270		0		270
Non-accrual loans	4,387			3,747		3,869		5,725		4,619		4,387		4,619
Loans past due 90 days or more and still accruing	95			141		12		23		20		95		20
Total nonperforming loans	$	4,482		3,888		3,881		5,748		4,639		4,482		4,639
Net charge-offs (recoveries) to average loans	(0.02		)%	0.08	%	0.13	%	0.14	%	(0.03	)%	0.10	%	0.05	%
Allowance for loan losses to total loans	0.41		%	0.41	%	0.41	%	0.44	%	0.47	%	0.41	%	0.47	%
Nonperforming loans to total loans	0.54		%	0.47	%	0.48	%	0.70	%	0.57	%	0.54	%	0.57	%
Nonperforming assets to total assets	0.34		%	0.29	%	0.29	%	0.44	%	0.37	%	0.34	%	0.37	%
Assets Under Management
LCNB Corp. total assets	$	1,314,319		1,335,571		1,319,074		1,306,799		1,333,536
Trust and investments (fair value)	326,642			315,450		316,856		303,534		293,808
Mortgage loans serviced	96,241			98,234		99,324		100,982		105,018
Cash management	77,780			45,519		29,102		30,319		27,453
Brokerage accounts (fair value)	219,960			209,019		199,019		188,663		179,244
Total assets managed	$	2,034,942		2,003,793		1,963,375		1,930,297		1,939,059

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

	September 30, 2017 (Unaudited)			December 31, 2016
ASSETS:
Cash and due from banks	$	15,393		18,378
Interest-bearing demand deposits	5,810			487
Total cash and cash equivalents	21,203			18,865
Investment securities:
Available-for-sale, at fair value	310,404			320,659
Held-to-maturity, at cost	36,860			41,003
Federal Reserve Bank stock, at cost	2,732			2,732
Federal Home Loan Bank stock, at cost	3,638			3,638
Loans, net	830,797			816,228
Premises and equipment, net	34,897			30,244
Goodwill	30,183			30,183
Core deposit and other intangibles	4,003			4,582
Bank owned life insurance	27,795			27,307
Other assets	11,807			11,358
TOTAL ASSETS	$	1,314,319		1,306,799
LIABILITIES:
Deposits:
Noninterest-bearing	$	278,773		271,332
Interest-bearing	842,750			839,573
Total deposits	1,121,523			1,110,905
Short-term borrowings	30,000			42,040
Long-term debt	363			598
Accrued interest and other liabilities	12,720			10,312
TOTAL LIABILITIES	1,164,606			1,163,855
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 shares at September 30, 2017 and December 31, 2016; issued 10,772,134 and 10,751,652 shares at September 30, 2017 and December 31, 2016, respectively	76,877			76,490
Retained earnings	85,287			80,736
Treasury shares at cost, 753,627 shares at September 30, 2017 and December 31, 2016	(11,665		)	(11,665	)
Accumulated other comprehensive income (loss), net of taxes	(786		)	(2,617	)
TOTAL SHAREHOLDERS' EQUITY	149,713			142,944
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,314,319		1,306,799

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,
	2017			2016	2017	2016
INTEREST INCOME:
Interest and fees on loans	$	9,095		8,876	26,833	26,395
Interest on investment securities –
Taxable	1,108			1,152	3,350	3,528
Non-taxable	783			813	2,377	2,365
Other short-term investments	69			54	293	236
TOTAL INTEREST INCOME	11,055			10,895	32,853	32,524
INTEREST EXPENSE:
Interest on deposits	850			872	2,539	2,565
Interest on short-term borrowings	55			8	97	30
Interest on long-term debt	3			5	10	22
TOTAL INTEREST EXPENSE	908			885	2,646	2,617
NET INTEREST INCOME	10,147			10,010	30,207	29,907
PROVISION FOR LOAN LOSSES	(12		)	372	225	858
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	10,159			9,638	29,982	29,049
NON-INTEREST INCOME:
Trust income	871			871	2,604	2,471
Service charges and fees on deposit accounts	1,352			1,276	3,886	3,712
Net gain (loss) on sales of securities	78			307	218	957
Bank owned life insurance income	190			193	676	553
Gains from sales of loans	34			73	136	175
Other operating income	134			126	359	370
TOTAL NON-INTEREST INCOME	2,659			2,846	7,879	8,238
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,678			4,642	13,907	13,737
Equipment expenses	361			279	836	767
Occupancy expense, net	685			550	1,889	1,707
State franchise tax	281			279	851	836
Marketing	282			162	641	530
Amortization of intangibles	189			189	562	564
FDIC insurance premiums	108			168	320	495
Contracted services	307			300	930	750
Other real estate owned	3			222	8	607
Other non-interest expense	1,778			1,802	5,307	5,360
TOTAL NON-INTEREST EXPENSE	8,672			8,593	25,251	25,353
INCOME BEFORE INCOME TAXES	4,146			3,891	12,610	11,934
PROVISION FOR INCOME TAXES	1,040			995	3,255	3,106
NET INCOME	$	3,106		2,896	9,355	8,828
Dividends declared per common share	$	0.16		0.16	0.48	0.48
Earnings per common share:
Basic	0.31			0.29	0.93	0.89
Diluted	0.31			0.29	0.93	0.88
Weighted average common shares outstanding:
Basic	10,008,807			9,962,571	10,002,812	9,930,182
Diluted	10,015,204			9,977,592	10,009,942	9,974,319

Contacts

LCNB Corp.

Steve P. Foster, CEO & President, 800-344-BANK

Robert C. Haines II, Executive Vice President and CFO, 800-344-BANK