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LCNB Corp. Reports Financial Results for the Three and Six Months Ended June 30, 2024

Second quarter results include the initial contribution of the April 12, 2024 Eagle Financial Bancorp, Inc. acquisition and the growing benefits of the November 1, 2023 Cincinnati Bancorp, Inc. acquisition

LCNB ended the quarter with record total assets, record LCNB Wealth Management assets, and record total assets managed of $4.21 billion

Non-interest income for the 2024 second quarter increased 11.9% year-over-year to $4.1 million, and up 3.8% from the first quarter

Net interest margin for the 2024 second quarter increased 14 basis points from the 2024 first quarter

Management continues to expect year-over-year earnings growth to reaccelerate in the fourth quarter of 2024

LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three months and six months ended June 30, 2024.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, “Our second quarter results demonstrate the initial contribution of the April 12, 2024 Eagle Financial Bancorp, Inc. (“EFBI” or “Eagle”) acquisition and the growing benefits of the November 1, 2023 Cincinnati Bancorp, Inc. (“Cincinnati Federal”) acquisition. As a result of these transformative transactions, LCNB's scale increased to $4.21 billion in total assets managed, becoming one of the largest independent community banks in Ohio. I am extremely proud of how our teams have come together to successfully integrate the Eagle and Cincinnati Federal acquisitions. During the 2024 second quarter, we completed the data and customer conversion of the Eagle transaction, and we are now on one system under the LCNB brand.”

Mr. Meilstrup continued, “We believe our financial results are beginning to reflect the benefits of our larger scale and the opportunities to provide additional financial services to customers across our Ohio and Kentucky markets, including expanded wealth management solutions, greater mortgage loan capabilities, and additional cash management offerings. As a result, we experienced year-over-year and sequential growth in non-interest income, and we saw a 14-basis point sequential increase in our tax equivalent net interest margin. In addition, I am encouraged by the significant improvement in adjusted net income, a non-GAAP financial measure that excludes certain nonrecurring items, over the past three months, as our 2024 second quarter adjusted net income increased by 56.8% to $4.1 million, or $0.29 per diluted share.”

“We believe we are well positioned for continued improvements in profitability as a result of the completion of our integration efforts, our excellent asset quality, and the initiatives we are pursuing to strengthen our balance sheet. I look forward to updating shareholders on the progress we are making, as we focus on providing leading financial services and expanding our product offerings to more customers throughout our Ohio and Kentucky communities,” concluded Mr. Meilstrup.

Income Statement

Net income for the 2024 second quarter was $0.9 million, compared to net income of $4.7 million for the same period last year. Earnings per basic and diluted share for the 2024 second quarter were $0.07, compared to $0.42 for the same period last year. Net income for the six-month period ended June 30, 2024 was $2.8 million, compared to $8.9 million for the same period last year. Earnings per basic and diluted share for the six-month period ended June 30, 2024 were $0.21, compared to $0.79 for the same period last year.

Adjusted net income for the 2024 second quarter was $4.1 million, or $0.29 per basic and diluted share, compared to $5.0 million, or $0.45 per basic and diluted share, for the same period last year. Adjusted net income for the first half ended June 30, 2024 was $6.7 million, or $0.49 per basic and diluted share, compared to $9.2 million, or $0.82 per basic and diluted share, in the prior year period.

Net interest income for the three months ended June 30, 2024 was $15.2 million, compared to $14.2 million for the comparable period in 2023. Net interest income for the six-month period ended June 30, 2024 was $29.1 million, as compared to $28.1 million in the same period last year. An increase in interest income from loans, due to a higher volume of average loans outstanding and the average rates earned on these loans, was partially offset by higher average balances in interest-bearing demand and money market deposits, IRA and time certificates, and long-term debt and an increase in rates paid for these liabilities. For the 2024 second quarter, LCNB’s tax equivalent net interest margin was 2.86%, compared to 3.28% for the same period last year. Net interest margin for the six-month period ended June 30, 2024 was 2.80%, as compared to 3.28% in the same period last year.

Non-interest income for the three months ended June 30, 2024 was $4.1 million, compared to $3.6 million for the same period last year. For the six months ended June 30, 2024, non-interest income increased $782,000, or by 10.8%, to $8.0 million, compared to $7.2 million for the same period last year. The increase in non-interest income for both the three- and six-month periods was primarily due to higher fiduciary income and higher gains on sales of loans. Partially offsetting non-interest income during the quarter was a $843,000 pretax loss on the sale of approximately $48.9 million of below market rate loans acquired from Cincinnati Federal. The Company estimates an earn-back period of three to four months on the sale associated with reduced interest expense.

Non-interest expense for the three months ended June 30, 2024 was $17.8 million, compared to $12.1 million for the same period last year. The $5.7 million increase was primarily due to higher personnel and operating expenses, as well as one-time merger related expenses, associated with the Cincinnati Federal and Eagle acquisitions. For the six months ended June 30, 2024, non-interest expense was $8.7 million higher than the comparable period in 2023, partially due to an increase of $3.2 million in salaries and employee benefit costs, a $459,000 increase in FDIC insurance premiums, and a $2.7 million increase in merger-related expenses. In addition, non-interest expense for the 2023 second quarter benefited from a $425,000 gain recognized on the sale of an office building that had been closed as a result of LCNB's office consolidation strategy. The remaining net increase can be attributed to smaller increases in various other accounts.

Capital Allocation

During the six months ended June 30, 2024, LCNB did not repurchase any of its outstanding shares. At June 30, 2024, LCNB had 315,047 shares remaining under its share repurchase program.

For the second quarter ended June 30, 2024, LCNB paid $0.22 per share in dividends, a 4.8% increase from $0.21 per share in the second quarter of last year. Year-to-date, LCNB paid $0.44 per share in dividends, compared to $0.42 per share for the first half of last year.

Balance Sheet

Total assets at June 30, 2024 increased 21.6%, to $2.37 billion, from $1.95 billion at June 30, 2023. Net loans at June 30, 2024 increased 20.9%, to $1.73 billion, compared to $1.43 billion at June 30, 2023. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Cincinnati Federal and Eagle acquisitions. Not including the Cincinnati Federal and Eagle acquisitions, total net loans increased 2.1% organically, or by $30.4 million, from the same period a year ago.

Loans held for sale totaled $44.0 million, compared to $75.6 million at March 31, 2024, and are primarily composed of loans scheduled to be sold to an investor during the remainder of 2024. LCNB anticipates that proceeds from the sale will be used for general corporate purposes, which may include supporting loan growth, paying down long-term debt, and adding to liquidity balances.

Total deposits at June 30, 2024 increased 21.7% to $1.94 billion, compared to $1.60 billion at June 30, 2023. Not including the Cincinnati Federal and Eagle acquisitions, total deposits increased 6.8% organically, or by $108.7 million, from June 30, 2023.

As of the transaction date, the fair value of loans acquired from Eagle totaled $127.0 million and the fair value of deposits acquired totaled $132.4 million. Core deposit intangibles totaled $3.8 million and the increase to goodwill was $14.0 million.

Assets Under Management

Total assets managed at June 30, 2024 were a record $4.21 billion, compared to $3.23 billion at June 30, 2023. The year-over-year increase in total assets managed was primarily due to the Cincinnati Federal and Eagle acquisitions and organic growth in LCNB total assets, trust and investments, mortgage loans serviced, and brokerage accounts. Organically, trust and investments and brokerage accounts increased due to a higher number of new LCNB Wealth Management customer accounts and an increase in the fair value of managed assets. Mortgage loans serviced increased primarily due to the Cincinnati Federal acquisition.

Asset Quality

For the 2024 second quarter, LCNB recorded a provision for credit losses of $528,000, compared to a provision for credit losses of $30,000 for the 2023 second quarter. For the six months ended June 30, 2024, LCNB recorded a total provision for credit losses of $653,000, compared to a total recovery of credit losses of $27,000 for the six months ended June 30, 2023.

Net charge-offs for the 2024 second quarter were $18,000, or 0.00% of average loans, compared to net charge-offs of $33,000, or 0.01% of average loans, annualized, for the same period last year. For the 2024 six-month period, net charge-offs were $63,000, or 0.01% of average loans, compared to net charge-offs of $49,000, or 0.01% of average loans, for the 2023 six-month period.

Total nonperforming loans, which include non-accrual loans and loans past due 90 days or more and still accruing interest, were $3.0 million, or 0.17% of total loans, at June 30, 2024, compared to $707,000, or 0.05% of total loans, at June 30, 2023. The year-over-year increase in nonaccrual loans was primarily due to one commercial real estate relationship, representing a balance of $2.6 million. LCNB does not foresee a loss on this loan as it is deemed to have adequate provision based on management’s current review of the property value. The nonperforming assets to total assets ratio was 0.13% at June 30, 2024, compared to 0.04% at June 30, 2023.

About LCNB Corp.

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 and Northern Kentucky. 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, Franklin, Hamilton, Montgomery, Preble, Ross, and Warren Counties, Ohio. The Bank also provides community-oriented banking services to customers in Northern Kentucky through a bank office in Boone County, Kentucky. 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.

Forward-Looking Statements

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. Please refer to LCNB’s Annual Report on Form 10-K for the year ended December 31, 2023, as well as its other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

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’s ability to integrate recent and future acquisitions may be unsuccessful or may be more difficult, time-consuming, or costly than expected;
  3. LCNB may incur increased loan charge-offs in the future and the allowance for credit losses may be inadequate;
  4. LCNB may face competitive loss of customers;
  5. changes in the interest rate environment, which may include further interest rate increases, may have results on LCNB’s operations materially different from those anticipated by LCNB’s market risk management functions;
  6. changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
  7. changes in regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact LCNB’s operating results;
  8. LCNB may experience difficulties growing loan and deposit balances;
  9. United States trade relations with foreign countries could negatively impact the financial condition of LCNB's customers, which could adversely affect LCNB 's operating results and financial condition;
  10. global geopolitical relations and/or conflicts could create financial market uncertainty and have negative impacts on commodities and currency, which could adversely affect LCNB's operating results and financial condition;
  11. difficulties with technology or data security breaches, including cyberattacks, could negatively affect LCNB's ability to conduct business and its relationships with customers, vendors, and others;
  12. adverse weather events and natural disasters and global and/or national epidemics could negatively affect LCNB’s customers given its concentrated geographic scope, which could impact LCNB’s operating results; and
  13. government intervention in the U.S. financial system, including the effects of legislative, tax, accounting, and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Jumpstart Our Business Startups Act, the Consumer Financial Protection Bureau, the capital ratios of Basel III as adopted by the federal banking authorities, changes in deposit insurance premium levels, and any such future regulatory actions or reforms.

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.

Exhibit 99.2

LCNB Corp. and Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

06-30-2024

 

03-31-2024

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

06-30-2024

 

06-30-2023

Condensed Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

26,965

 

 

$

24,758

 

 

$

23,310

 

 

 

19,668

 

 

 

18,703

 

 

51,723

 

 

36,621

 

Interest expense

 

11,748

 

 

 

10,863

 

 

 

8,651

 

 

 

6,097

 

 

 

4,526

 

 

22,611

 

 

8,502

 

Net interest income

 

15,217

 

 

 

13,895

 

 

 

14,659

 

 

 

13,571

 

 

 

14,177

 

 

29,112

 

 

28,119

 

Provision for (recovery of) credit losses

 

528

 

 

 

125

 

 

 

2,218

 

 

 

(114

)

 

 

30

 

 

653

 

 

(27

)

Net interest income after provision for (recovery of) credit losses

 

14,689

 

 

 

13,770

 

 

 

12,441

 

 

 

13,685

 

 

 

14,147

 

 

28,459

 

 

28,146

 

Non-interest income

 

4,080

 

 

 

3,929

 

 

 

4,606

 

 

 

3,578

 

 

 

3,646

 

 

8,009

 

 

7,227

 

Non-interest expense

 

17,825

 

 

 

15,472

 

 

 

17,576

 

 

 

12,244

 

 

 

12,078

 

 

33,297

 

 

24,603

 

Income (loss) before income taxes

 

944

 

 

 

2,227

 

 

 

(529

)

 

 

5,019

 

 

 

5,715

 

 

3,171

 

 

10,770

 

Provision for (benefit from) income taxes

 

19

 

 

 

312

 

 

 

(236

)

 

 

949

 

 

 

1,021

 

 

331

 

 

1,919

 

Net income (loss)

$

925

 

 

$

1,915

 

 

$

(293

)

 

$

4,070

 

 

 

4,694

 

 

2,840

 

 

8,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Income Statement Information

 

 

 

 

 

 

 

 

 

 

 

 

Amort/Accrete income on acquired loans

$

1,248

 

 

$

776

 

 

$

410

 

 

 

 

 

 

 

 

2,024

 

 

74

 

Amort/Accrete expenses on acquired interest-bearing liabilities

$

638

 

 

$

459

 

 

$

309

 

 

 

 

 

 

 

 

1,096

 

 

 

Tax-equivalent net interest income

$

15,256

 

 

$

13,933

 

 

$

14,703

 

 

 

13,617

 

 

 

14,223

 

 

29,189

 

 

28,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.22

 

 

$

0.22

 

 

$

0.22

 

 

 

0.21

 

 

 

0.21

 

 

0.44

 

 

0.42

 

Basic earnings (loss) per common share

$

0.07

 

 

$

0.15

 

 

$

(0.02

)

 

 

0.37

 

 

 

0.42

 

 

0.21

 

 

0.79

 

Diluted earnings (loss) per common share

$

0.07

 

 

$

0.15

 

 

$

(0.02

)

 

 

0.37

 

 

 

0.42

 

 

0.21

 

 

0.79

 

Book value per share

$

17.33

 

 

$

17.67

 

 

$

17.86

 

 

 

18.10

 

 

 

18.20

 

 

17.33

 

 

18.20

 

Tangible book value per share

$

10.08

 

 

$

11.26

 

 

$

11.42

 

 

 

12.72

 

 

 

12.81

 

 

10.08

 

 

12.81

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

14,033,264

 

 

 

13,112,302

 

 

 

12,378,289

 

 

 

11,038,720

 

 

 

11,056,308

 

 

13,610,854

 

 

11,122,371

 

Diluted

 

14,033,264

 

 

 

13,112,302

 

 

 

12,378,289

 

 

 

11,038,720

 

 

 

11,056,308

 

 

13,610,854

 

 

11,122,371

 

Shares outstanding at period end

 

14,151,755

 

 

 

13,224,276

 

 

 

13,173,569

 

 

 

11,123,382

 

 

 

11,116,080

 

 

14,151,755

 

 

11,116,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.15

%

 

 

0.34

%

 

 

(0.05

)%

 

 

0.82

%

 

 

0.98

%

 

0.24

%

 

0.93

%

Return on average equity

 

1.53

%

 

 

3.28

%

 

 

(0.53

)%

 

 

7.92

%

 

 

9.22

%

 

2.38

%

 

8.78

%

Return on average tangible common equity

 

2.02

%

 

 

4.39

%

 

 

(0.72

)%

 

 

11.21

%

 

 

13.07

%

 

3.17

%

 

12.46

%

Dividend payout ratio

 

314.29

%

 

 

146.67

%

 

 

NM

 

 

 

56.76

%

 

 

50.00

%

 

209.52

%

 

53.16

%

Net interest margin (tax equivalent)

 

2.86

%

 

 

2.72

%

 

 

2.99

%

 

 

3.04

%

 

 

3.28

%

 

2.80

%

 

3.28

%

Efficiency ratio (tax equivalent)

 

92.19

%

 

 

86.62

%

 

 

91.02

%

 

 

71.21

%

 

 

67.59

%

 

89.51

%

 

69.42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

34,872

 

 

$

32,951

 

 

$

39,723

 

 

 

43,422

 

 

 

26,020

 

 

 

 

 

Debt and equity securities

 

312,241

 

 

 

306,775

 

 

 

318,723

 

 

 

309,094

 

 

 

314,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

125,703

 

 

$

122,229

 

 

$

120,411

 

 

 

125,751

 

 

 

127,553

 

 

 

 

 

Commercial, secured by real estate

 

1,117,798

 

 

 

1,099,601

 

 

 

1,107,556

 

 

 

981,787

 

 

 

961,173

 

 

 

 

 

Residential real estate

 

458,949

 

 

 

398,250

 

 

 

459,073

 

 

 

313,286

 

 

 

312,338

 

 

 

 

 

Consumer

 

22,912

 

 

 

24,137

 

 

 

25,578

 

 

 

27,018

 

 

 

29,007

 

 

 

 

 

Agricultural

 

11,685

 

 

 

12,647

 

 

 

10,952

 

 

 

11,278

 

 

 

9,955

 

 

 

 

 

Other, including deposit overdrafts

 

233

 

 

 

73

 

 

 

82

 

 

 

80

 

 

 

69

 

 

 

 

 

Deferred net origination fees

 

(533

)

 

 

(583

)

 

 

(181

)

 

 

(796

)

 

 

(844

)

 

 

 

 

Loans, gross

 

1,736,747

 

 

 

1,656,354

 

 

 

1,723,471

 

 

 

1,458,404

 

 

 

1,439,251

 

 

 

 

 

Less allowance for credit losses

 

11,270

 

 

 

10,557

 

 

 

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

 

 

Loans, net

$

1,725,477

 

 

 

1,645,797

 

 

 

1,712,946

 

 

 

1,450,472

 

 

 

1,431,295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

44,002

 

 

 

75,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NM - Not Meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

06-30-2024

 

03-31-2024

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

06-30-2024

 

06-30-2023

Selected Balance Sheet Items, continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses on Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses, beginning of period

$

10,557

 

 

 

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

7,858

 

 

 

 

 

Fair value adjustment for purchased credit deteriorated loans

 

189

 

 

 

 

 

 

493

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

542

 

 

 

77

 

 

 

2,203

 

 

 

9

 

 

 

131

 

 

 

 

 

Losses charged off

 

(87

)

 

 

(78

)

 

 

(126

)

 

 

(57

)

 

 

(49

)

 

 

 

 

Recoveries

 

69

 

 

 

33

 

 

 

23

 

 

 

24

 

 

 

16

 

 

 

 

 

Allowance for credit losses, end of period

$

11,270

 

 

 

10,557

 

 

 

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets

$

2,058,110

 

 

$

1,971,130

 

 

$

2,045,382

 

 

 

1,787,796

 

 

$

1,756,157

 

 

 

 

 

Total assets

 

2,371,313

 

 

 

2,283,151

 

 

 

2,291,592

 

 

 

1,981,668

 

 

 

1,950,763

 

 

 

 

 

Total deposits

 

1,943,060

 

 

 

1,858,493

 

 

 

1,824,389

 

 

 

1,616,890

 

 

 

1,596,709

 

 

 

 

 

Short-term borrowings

 

 

 

 

10,000

 

 

 

97,395

 

 

 

30,000

 

 

 

112,289

 

 

 

 

 

Long-term debt

 

162,150

 

 

 

162,638

 

 

 

113,123

 

 

 

112,641

 

 

 

18,122

 

 

 

 

 

Total shareholders’ equity

 

245,214

 

 

 

233,663

 

 

 

235,303

 

 

 

201,349

 

 

 

202,316

 

 

 

 

 

Equity to assets ratio

 

10.34

%

 

 

10.23

%

 

 

10.27

%

 

 

10.16

%

 

 

10.37

%

 

 

 

 

Loans to deposits ratio

 

89.38

%

 

 

89.12

%

 

 

94.47

%

 

 

90.20

%

 

 

90.14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity (TCE)

$

142,679

 

 

$

145,850

 

 

$

146,999

 

 

 

141,508

 

 

 

142,362

 

 

 

 

 

Tangible common assets (TCA)

 

2,268,778

 

 

 

2,195,338

 

 

 

2,203,288

 

 

 

1,921,827

 

 

 

1,890,809

 

 

 

 

 

TCE/TCA

 

6.29

%

 

 

6.64

%

 

 

6.67

%

 

 

7.36

%

 

 

7.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

39,396

 

 

$

51,366

 

 

$

49,436

 

 

 

36,177

 

 

 

30,742

 

 

45,378

 

 

33,205

 

Debt and equity securities

 

309,668

 

 

 

310,771

 

 

 

310,274

 

 

 

313,669

 

 

 

321,537

 

 

310,222

 

 

324,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including loans held for sale

$

1,818,253

 

 

$

1,722,568

 

 

$

1,622,911

 

 

 

1,451,153

 

 

 

1,405,939

 

 

1,770,410

 

 

1,397,708

 

Less allowance for credit losses on loans

 

11,386

 

 

 

10,523

 

 

 

8,826

 

 

 

7,958

 

 

 

7,860

 

 

10,954

 

 

7,692

 

Net loans

$

1,806,867

 

 

 

1,712,045

 

 

 

1,614,085

 

 

 

1,443,195

 

 

 

1,398,079

 

 

1,759,456

 

 

1,390,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets, including loans held for sale

$

2,142,064

 

 

$

2,056,656

 

 

$

1,952,121

 

 

 

1,775,713

 

 

 

1,737,256

 

 

2,099,362

 

 

1,733,160

 

Total assets

 

2,404,782

 

 

 

2,294,766

 

 

 

2,182,477

 

 

 

1,971,269

 

 

 

1,927,956

 

 

2,349,774

 

 

1,925,004

 

Total deposits

 

1,965,987

 

 

 

1,824,546

 

 

 

1,759,677

 

 

 

1,610,508

 

 

 

1,604,346

 

 

1,895,268

 

 

1,594,159

 

Short-term borrowings

 

11,291

 

 

 

65,052

 

 

 

64,899

 

 

 

63,018

 

 

 

79,485

 

 

38,171

 

 

86,996

 

Long-term debt

 

162,555

 

 

 

150,177

 

 

 

115,907

 

 

 

72,550

 

 

 

18,514

 

 

156,366

 

 

18,747

 

Total shareholders’ equity

 

243,927

 

 

 

235,119

 

 

 

220,678

 

 

 

203,967

 

 

 

204,085

 

 

239,523

 

 

203,257

 

Equity to assets ratio

 

10.14

%

 

 

10.25

%

 

 

10.11

%

 

 

10.35

%

 

 

10.59

%

 

10.19

%

 

10.56

%

Loans to deposits ratio

 

92.49

%

 

 

94.41

%

 

 

92.23

%

 

 

90.11

%

 

 

87.63

%

 

93.41

%

 

87.68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs

$

18

 

 

$

45

 

 

$

102

 

 

 

33

 

 

 

33

 

 

63

 

 

49

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans

$

2,845

 

 

$

2,719

 

 

$

80

 

 

 

85

 

 

 

451

 

 

2,845

 

 

451

 

Loans past due 90 days or more and still accruing

 

159

 

 

 

524

 

 

 

72

 

 

 

176

 

 

 

256

 

 

159

 

 

256

 

Total nonperforming loans

$

3,004

 

 

 

3,243

 

 

 

152

 

 

 

261

 

 

 

707

 

 

3,004

 

 

707

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans

 

0.00

%

 

 

0.01

%

 

 

0.02

%

 

 

0.01

%

 

 

0.01

%

 

0.01

%

 

0.01

%

Allowance for credit losses on loans to total loans

 

0.65

%

 

 

0.64

%

 

 

0.61

%

 

 

0.54

%

 

 

0.55

%

 

 

 

 

Nonperforming loans to total loans

 

0.17

%

 

 

0.20

%

 

 

0.01

%

 

 

0.02

%

 

 

0.05

%

 

 

 

 

Nonperforming assets to total assets

 

0.13

%

 

 

0.14

%

 

 

0.01

%

 

 

0.01

%

 

 

0.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

06-30-2024

 

03-31-2024

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

06-30-2024

 

06-30-2023

Assets Under Management

 

 

 

 

 

 

 

 

 

 

 

 

 

LCNB Corp. total assets

$

2,371,313

 

 

 

2,283,151

 

 

 

2,291,592

 

 

 

1,981,668

 

 

 

1,950,763

 

 

 

 

 

Trust and investments (fair value)

 

897,746

 

 

 

890,800

 

 

 

806,770

 

 

 

731,342

 

 

 

744,149

 

 

 

 

 

Mortgage loans serviced

 

422,951

 

 

 

386,490

 

 

 

391,800

 

 

 

146,483

 

 

 

143,093

 

 

 

 

 

Cash management

 

93,842

 

 

 

13,314

 

 

 

2,375

 

 

 

2,445

 

 

 

2,668

 

 

 

 

 

Brokerage accounts (fair value)

 

419,646

 

 

 

411,211

 

 

 

392,390

 

 

 

368,854

 

 

 

384,889

 

 

 

 

 

Total assets managed

$

4,205,498

 

 

 

3,984,966

 

 

 

3,884,927

 

 

 

3,230,792

 

 

 

3,225,562

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income Less Tax-Effected Merger-Related Costs

 

 

 

 

 

 

 

 

Net income (loss)

$

925

 

 

 

1,915

 

 

 

(293

)

 

 

4,070

 

 

 

4,694

 

 

2,840

 

 

8,851

 

Merger expenses

 

2,320

 

 

 

775

 

 

 

3,914

 

 

 

302

 

 

 

415

 

 

3,095

 

 

440

 

Provision for credit losses on non-PCD loans

 

763

 

 

 

 

 

 

1,722

 

 

 

 

 

 

 

 

763

 

 

 

Loss on sale of below-market acquired loans

 

843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

843

 

 

 

Tax effect

 

(773

)

 

 

(90

)

 

 

(1,102

)

 

 

(3

)

 

 

(63

)

 

(863

)

 

(67

)

Adjusted net income

$

4,078

 

 

 

2,600

 

 

 

4,241

 

 

 

4,369

 

 

 

5,046

 

 

6,678

 

 

9,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basic and diluted earnings per share

$

0.29

 

 

$

0.20

 

 

$

0.34

 

 

 

0.40

 

 

 

0.45

 

 

0.49

 

 

0.82

 

Adjusted return on average assets

 

0.68

%

 

 

0.46

%

 

 

0.77

%

 

 

0.88

%

 

 

1.05

%

 

0.57

%

 

0.97

%

Adjusted return on average equity

 

6.72

%

 

 

4.45

%

 

 

7.62

%

 

 

8.50

%

 

 

9.92

%

 

5.61

%

 

9.15

%

 

 

Three Months Ended June 30,

 

Three Months Ended March 31,

 

 

2024

 

2023

 

2024

 

 

Average

Outstanding

Balance

 

Interest

Earned/

Paid

 

Average

Yield/

Rate

 

Average

Outstanding

Balance

 

Interest

Earned/

Paid

 

Average

Yield/

Rate

 

Average

Outstanding

Balance

 

Interest

Earned/

Paid

 

Average

Yield/

Rate

Loans (1)

 

$

1,818,253

 

 

24,836

 

5.49

%

 

$

1,405,939

 

 

16,763

 

4.78

%

 

$

1,722,568

 

 

22,682

 

 

5.30

%

Interest-bearing demand deposits

 

 

14,143

 

 

215

 

6.11

%

 

 

9,780

 

 

144

 

5.91

%

 

 

23,317

 

 

324

 

 

5.59

%

Federal Reserve Bank stock

 

 

6,248

 

 

180

 

11.59

%

 

 

4,652

 

 

140

 

12.07

%

 

 

5,509

 

 

(4

)

 

(0.29

)%

Federal Home Loan Bank stock

 

 

20,152

 

 

367

 

7.32

%

 

 

6,713

 

 

121

 

7.23

%

 

 

16,239

 

 

341

 

 

8.45

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

4,985

 

 

39

 

3.15

%

 

 

3,386

 

 

38

 

4.50

%

 

 

4,995

 

 

40

 

 

3.22

%

Debt securities, taxable

 

 

259,768

 

 

1,183

 

1.83

%

 

 

282,325

 

 

1,323

 

1.88

%

 

 

265,164

 

 

1,232

 

 

1.87

%

Debt securities, non-taxable (2)

 

 

18,515

 

 

184

 

4.00

%

 

 

24,461

 

 

220

 

3.61

%

 

 

18,864

 

 

181

 

 

3.86

%

Total earnings assets

 

 

2,142,064

 

 

27,004

 

5.07

%

 

 

1,737,256

 

 

18,749

 

4.33

%

 

 

2,056,656

 

 

24,796

 

 

4.85

%

Non-earning assets

 

 

274,104

 

 

 

 

 

 

 

198,560

 

 

 

 

 

 

 

248,633

 

 

 

 

 

Allowance for credit losses

 

 

(11,386

)

 

 

 

 

 

 

(7,860

)

 

 

 

 

 

 

(10,523

)

 

 

 

 

Total assets

 

$

2,404,782

 

 

 

 

 

 

$

1,927,956

 

 

 

 

 

 

$

2,294,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand and money market deposits

 

$

648,772

 

 

3,575

 

2.22

%

 

$

521,422

 

 

1,597

 

1.23

%

 

$

643,199

 

 

3,917

 

 

2.45

%

Savings deposits

 

 

372,240

 

 

307

 

0.33

%

 

 

395,367

 

 

134

 

0.14

%

 

 

368,049

 

 

206

 

 

0.23

%

IRA and time certificates

 

 

493,297

 

 

5,808

 

4.74

%

 

 

215,403

 

 

1,604

 

2.99

%

 

 

370,130

 

 

4,067

 

 

4.42

%

Short-term borrowings

 

 

11,291

 

 

181

 

6.45

%

 

 

79,485

 

 

1,008

 

5.09

%

 

 

65,052

 

 

935

 

 

5.78

%

Long-term debt

 

 

162,555

 

 

1,877

 

4.64

%

 

 

18,514

 

 

183

 

3.96

%

 

 

150,177

 

 

1,738

 

 

4.65

%

Total interest-bearing liabilities

 

 

1,688,155

 

 

11,748

 

2.80

%

 

 

1,230,191

 

 

4,526

 

1.48

%

 

 

1,596,607

 

 

10,863

 

 

2.74

%

Demand deposits

 

 

451,678

 

 

 

 

 

 

 

472,154

 

 

 

 

 

 

 

443,168

 

 

 

 

 

Other liabilities

 

 

21,022

 

 

 

 

 

 

 

21,526

 

 

 

 

 

 

 

19,872

 

 

 

 

 

Equity

 

 

243,927

 

 

 

 

 

 

 

204,085

 

 

 

 

 

 

 

235,119

 

 

 

 

 

Total liabilities and equity

 

$

2,404,782

 

 

 

 

 

 

$

1,927,956

 

 

 

 

 

 

$

2,294,766

 

 

 

 

 

Net interest rate spread (3)

 

 

 

 

 

2.27

%

 

 

 

 

 

2.85

%

 

 

 

 

 

2.11

%

Net interest income and net interest margin on a taxable-equivalent basis (4)

 

 

 

15,256

 

2.86

%

 

 

 

14,223

 

3.28

%

 

 

 

13,933

 

 

2.72

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

126.89

%

 

 

 

 

 

 

141.22

%

 

 

 

 

 

 

128.81

%

 

 

 

 

(1)

 

Includes non-accrual loans and loans held for sale

(2)

 

Income from tax-exempt securities is included in interest income on a taxable-equivalent basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 21%.

(3)

 

The net interest spread is the difference between the average rate on total interest-earning assets and interest-bearing liabilities.

(4)

 

The net interest margin is the taxable-equivalent net interest income divided by average interest-earning assets.

Exhibit 99.2 

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited, dollars in thousands)

 

 

June 30,

2024

 

December 31,

2023

ASSETS:

 

 

 

Cash and due from banks

$

25,750

 

 

 

36,535

 

Interest-bearing demand deposits

 

9,122

 

 

 

3,188

 

Total cash and cash equivalents

 

34,872

 

 

 

39,723

 

Investment securities:

 

 

 

Equity securities with a readily determinable fair value, at fair value

 

1,330

 

 

 

1,336

 

Equity securities without a readily determinable fair value, at cost

 

3,666

 

 

 

3,666

 

Debt securities, available-for-sale, at fair value

 

261,357

 

 

 

276,601

 

Debt securities, held-to-maturity, at cost, net of allowance for credit losses of $7 and $5 at June 30, 2024 and December 31, 2023, respectively

 

18,844

 

 

 

16,858

 

Federal Reserve Bank stock, at cost

 

6,334

 

 

 

5,086

 

Federal Home Loan Bank stock, at cost

 

20,710

 

 

 

15,176

 

Loans, net of allowance for credit losses of $11,270 and 10,525 at June 30, 2024 and December 31, 2023, respectively

 

1,725,477

 

 

 

1,712,946

 

Loans held for sale

 

44,002

 

 

 

 

Premises and equipment, net

 

40,766

 

 

 

36,302

 

Operating lease right-of-use assets

 

6,026

 

 

 

6,000

 

Goodwill

 

93,922

 

 

 

79,509

 

Core deposit and other intangibles, net

 

12,135

 

 

 

9,494

 

Bank-owned life insurance

 

53,510

 

 

 

49,847

 

Interest receivable

 

9,473

 

 

 

8,405

 

Other assets, net

 

38,889

 

 

 

30,643

 

TOTAL ASSETS

$

2,371,313

 

 

 

2,291,592

 

 

 

 

 

LIABILITIES:

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

449,110

 

 

 

462,267

 

Interest-bearing

 

1,493,950

 

 

 

1,362,122

 

Total deposits

 

1,943,060

 

 

 

1,824,389

 

Short-term borrowings

 

 

 

 

97,395

 

Long-term debt

 

162,150

 

 

 

113,123

 

Operating lease liabilities

 

6,290

 

 

 

6,261

 

Accrued interest and other liabilities

 

14,599

 

 

 

15,121

 

TOTAL LIABILITIES

 

2,126,099

 

 

 

2,056,289

 

 

 

 

 

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; issued 17,363,138 and 16,384,952 shares at June 30, 2024 and December 31, 2023, respectively; outstanding 14,151,755 and 13,173,569 shares at June 30, 2024 and December 31, 2023, respectively

 

187,195

 

 

 

173,637

 

Retained earnings

 

136,883

 

 

 

140,017

 

Treasury shares at cost, 3,211,383 shares at June 30, 2024 and December 31, 2023

 

(56,015

)

 

 

(56,015

)

Accumulated other comprehensive loss, net of taxes

 

(22,849

)

 

 

(22,336

)

TOTAL SHAREHOLDERS' EQUITY

 

245,214

 

 

 

235,303

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

2,371,313

 

 

$

2,291,592

 

Exhibit 99.2 

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,

 

2024

 

2023

 

2024

 

2023

INTEREST INCOME:

 

 

 

 

 

 

 

Interest and fees on loans

$

24,836

 

16,763

 

47,518

 

 

32,906

 

Dividends on equity securities:

 

 

 

 

 

 

 

With a readily determinable fair value

 

9

 

8

 

18

 

 

25

 

Without a readily determinable fair value

 

30

 

30

 

61

 

 

50

 

Interest on debt securities:

 

 

 

 

 

 

 

Taxable

 

1,183

 

1,323

 

2,415

 

 

2,666

 

Non-taxable

 

145

 

174

 

288

 

 

350

 

Other investments

 

762

 

405

 

1,423

 

 

624

 

TOTAL INTEREST INCOME

 

26,965

 

18,703

 

51,723

 

 

36,621

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

Interest on deposits

 

9,690

 

3,335

 

17,880

 

 

5,791

 

Interest on short-term borrowings

 

181

 

1,008

 

1,116

 

 

2,312

 

Interest on long-term debt

 

1,877

 

183

 

3,615

 

 

399

 

TOTAL INTEREST EXPENSE

 

11,748

 

4,526

 

22,611

 

 

8,502

 

NET INTEREST INCOME

 

15,217

 

14,177

 

29,112

 

 

28,119

 

 

 

 

 

 

 

 

 

PROVISION FOR (RECOVERY OF) CREDIT LOSSES

 

528

 

30

 

653

 

 

(27

)

NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) CREDIT LOSSES

 

14,689

 

14,147

 

28,459

 

 

28,146

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

Fiduciary income

 

2,067

 

1,787

 

4,040

 

 

3,527

 

Service charges and fees on deposit accounts

 

1,537

 

1,445

 

2,921

 

 

2,927

 

Net losses from sales of debt securities, available-for-sale

 

 

 

(214

)

 

 

Bank-owned life insurance income

 

341

 

277

 

659

 

 

548

 

Net gains from sales of loans

 

50

 

3

 

572

 

 

9

 

Other operating income

 

85

 

134

 

31

 

 

216

 

TOTAL NON-INTEREST INCOME

 

4,080

 

3,646

 

8,009

 

 

7,227

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

Salaries and employee benefits

 

9,006

 

7,061

 

17,560

 

 

14,410

 

Equipment expenses

 

395

 

417

 

785

 

 

778

 

Occupancy expense, net

 

944

 

599

 

1,949

 

 

1,562

 

State financial institutions tax

 

476

 

396

 

904

 

 

793

 

Marketing

 

210

 

320

 

384

 

 

512

 

Amortization of intangibles

 

298

 

112

 

534

 

 

223

 

FDIC insurance premiums, net

 

394

 

224

 

898

 

 

439

 

Contracted services

 

844

 

666

 

1,628

 

 

1,307

 

Merger-related expenses

 

2,320

 

415

 

3,095

 

 

440

 

Other non-interest expense

 

2,938

 

1,868

 

5,560

 

 

4,139

 

TOTAL NON-INTEREST EXPENSE

 

17,825

 

12,078

 

33,297

 

 

24,603

 

INCOME BEFORE INCOME TAXES

 

944

 

5,715

 

3,171

 

 

10,770

 

PROVISION FOR INCOME TAXES

 

19

 

1,021

 

331

 

 

1,919

 

NET INCOME

$

925

 

4,694

 

2,840

 

 

8,851

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

$

0.07

 

0.42

 

0.21

 

 

0.79

 

Diluted

$

0.07

 

0.42

 

0.21

 

 

0.79

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

14,033,264

 

11,056,308

 

13,610,854

 

 

11,122,371

 

Diluted

 

14,033,264

 

11,056,308

 

13,610,854

 

 

11,122,371

 

 

Contacts

Company Contact:

Eric J. Meilstrup

President and Chief Executive Officer

LCNB National Bank

(513) 932-1414

shareholderrelations@lcnb.com

Investor and Media Contact:

Andrew M. Berger

Managing Director

SM Berger & Company, Inc.

(216) 464-6400

andrew@smberger.com

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