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LCNB Corp. Reports Record Financial Results for the Three and Six Months Ended June 30, 2023

Ended the Second Quarter with a Stable Deposit Base and a 90.14% Loan to Deposit Ratio

Net Loans Increased 4.7% Year-over-Year to a Record of $1.43 Billion

Asset Quality Remains Excellent with Total Nonperforming Loans to Total Loans of 0.05% at June 30, 2023

LCNB Wealth Management Assets Up 21.4% Year-over-Year to a Record $1.13 Billion

Cincinnati Bancorp, Inc. Acquisition Expected to Close in the 2023 Fourth Quarter

LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three and six months ended June 30, 2023.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, “I am pleased with our favorable second quarter performance and the progress we are making despite a difficult operating environment. During the second quarter, we increased net income and earnings per share from first quarter levels, maintained excellent asset quality, and achieved record net loans, LCNB Wealth Management assets, and total assets. In addition, our flexible balance sheet and solid capital levels allowed us to support our organic growth strategies and return capital back to our shareholders.”

“While we expect the challenging banking landscape to persist throughout the second half of 2023, we remain focused on managing the factors under our control. This includes controlling operating expenses, managing our balance sheet, maintaining excellent asset quality, and supporting our local communities. In addition, we continue to make progress completing the acquisition of Cincinnati Bancorp, which is expected to close during the 2023 fourth quarter. Once finalized, we expect LCNB will have total assets of approximately $2.3 billion with 33 banking offices in Ohio and one branch office in Northern Kentucky. With an expanded position within the greater Cincinnati and Northern Kentucky markets, we believe this transaction should enhance LCNB’s long-term profitability metrics and earnings growth rate in the future. We are excited to complete the acquisition and welcome Cincinnati Bancorp’s customers, employees, and shareholders to LCNB,” concluded Mr. Meilstrup.

Income Statement

Net income for the 2023 second quarter was $4,694,000, compared to $5,618,000 for the same period last year. Earnings per basic and diluted share for the 2023 second quarter were $0.42, compared to $0.49 for the same period last year. Net income for the six-month period ended June 30, 2023 was $8,851,000, compared to $10,141,000 for the same period last year. Earnings per basic and diluted share for the six-month period ended June 30, 2023 were $0.79, compared to $0.87 for the same period last year.

Adjusted net income for the 2023 second quarter was $5.0 million, or $0.45 per diluted share, compared to $5.6 million, or $0.49 per diluted share, in the prior year quarter. Adjusted net income accounts for the impact of one-time merger-related expenses, net of tax, associated with the Cincinnati Bancorp, Inc. acquisition. Adjusted net income for the first half ended June 30, 2023 was $9.2 million, or $0.82 per diluted share, compared to $10.1 million, or $0.87 per diluted share, in the prior year period.

Net interest income for the three months ended June 30, 2023 was $14,177,000, compared to $15,167,000 for the comparable period in 2022. Net interest income for the six-month period ended June 30, 2023 was $28,119,000, as compared to $29,390,000 in the same period last year. Contributing to the variances for both the three and six-month periods were increases in the amount of short-term borrowings combined with higher interest expense associated with the rapid year-over-year increase in the Effective Federal Funds Rate. For the 2023 second quarter, LCNB’s tax equivalent net interest margin was 3.28%, compared to 3.54% for the same period last year.

Non-interest income for the three months ended June 30, 2023 increased $118,000, or by 3.3%, to $3,646,000, compared to $3,528,000 for the same period last year. For the six months ended June 30, 2023, non-interest income increased $149,000, or by 2.1%, to $7,227,000, compared to $7,078,000 for the same period last year. The increase in non-interest income for both the three and six-month periods were primarily due to higher fiduciary income and a decrease in net unrealized losses recognized on equity securities, partially offset by lower gains on sales of loans. Also contributing to the increase during the six-month period were gains recognized on the sale of equity securities during the 2023 first quarter.

Non-interest expense for the three months ended June 30, 2023 was $609,000 greater than the comparable period in 2022, primarily due to $415,000 in one-time merger-related expenses. For the first half ended June 30, 2023, non-interest expense was $884,000 higher than the comparable period in 2022, partially due to $440,000 in merger-related expenses. In addition, non-interest expense for the 2022 second quarter benefited from an $889,000 gain from the sale of other real estate owned.

Capital Allocation

During the 2023 second quarter, LCNB invested $1.5 million to repurchase 92,885 shares of its outstanding stock at an average price of $15.86 per share. Year-to-date, LCNB invested $3.3 million to repurchase 199,913 shares of its outstanding stock at an average price of $16.47 per share. This equates to approximately 1.78% of the Company’s outstanding common stock prior to the repurchase. At June 30, 2023, LCNB had 315,047 shares remaining under its February 2023 share repurchase program. For the second quarter ended June 30, 2023, LCNB paid $0.21 per share in dividends, a 5.0% increase from $0.20 per share for the second quarter last year. Year-to-date, LCNB paid $0.42 per share in dividends, compared to $0.40 per share for the first half last year.

Balance Sheet

Total assets at June 30, 2023 increased 1.9% to a record $1.95 billion from $1.91 billion at June 30, 2022. Net loans at June 30, 2023 increased 4.7% to a record $1.43 billion, compared to $1.37 billion at June 30, 2022.

Total deposits at June 30, 2023 decreased 3.7% to $1.60 billion, compared to $1.66 billion at June 30, 2022, as LCNB experienced greater competition for deposit accounts. LCNB’s uninsured deposits to total deposits was approximately 11.7% for the quarter ended June 30, 2023.

Assets Under Management

Total assets managed at June 30, 2023 were a record $3.23 billion, compared to $3.04 billion at June 30, 2022. The year-over-year increase in total assets managed was primarily due to increases in LCNB Corp. total assets, trust and investments, and brokerage accounts. Trust and investments and brokerage accounts increased due to a higher number of new LCNB Wealth Management customer accounts opened over the past twelve months and an increase in the fair value of managed assets associated with an improving capital market environment, partially offset by decreases in cash management accounts and mortgage loans serviced.

Asset Quality

For the 2023 second quarter, the total provision for credit losses was $30,000, compared to a total provision for credit losses of $377,000 for the 2022 second quarter. For the six months ended June 30, 2023, LCNB recorded a total recovery of credit losses of $27,000, compared to a total provision for credit losses of $426,000 for the six months ended June 30, 2022.

Net charge-offs for the 2023 second quarter were $33,000, or 0.01% of average loans, compared to net charge-offs of $74,000, or 0.02% of average loans, for the same period last year. For the 2023 six-month period, net charge-offs were $49,000, or 0.01% of average loans, compared to net charge-offs of $99,000, or 0.03% of average loans, for the 2022 six-month period.

Total nonperforming loans, which includes non-accrual loans and loans past due 90 days or more and still accruing interest, increased $111,000 from $599,000 or 0.04% of total loans at June 30, 2022, to $710,000 or 0.05% of total loans at June 30, 2023. Nonperforming assets to total assets was 0.04% at June 30, 2023, compared to 0.03% at June 30, 2022.

Merger Agreement With Cincinnati Bancorp, Inc.

LCNB and Cincinnati Bancorp, Inc. (“CNNB”), the holding company for Cincinnati Federal, a federally chartered stock savings and loan association, signed a definitive merger agreement on May 18, 2023 whereby LCNB will acquire CNNB in a stock-and-cash transaction. CNNB operates five full-service branch offices in Cincinnati, Ohio and Northern Kentucky. When completed, the transaction will significantly increase LCNB’s existing presence in the Cincinnati market and expand LCNB’s community banking franchise across the Ohio River into the Northern Kentucky market.

Subject to the terms of the merger agreement, which has been approved by the Board of Directors of each company, CNNB shareholders will have the opportunity to elect to receive either 0.9274 shares of LCNB stock or $17.21 per share in cash for each share of CNNB common stock owned, subject to 80% of all CNNB shares being exchanged for LCNB common stock. Subject to regulatory approval, CNNB shareholder approval, and other customary conditions set forth in the definitive merger agreement, the transaction is anticipated to close in the fourth quarter of 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. 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 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, 2022, 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. the uncertainties for LCNB's business, results of operations and financial condition resulting from the recovery from the COVID-19 pandemic;
  3. LCNB’s ability to integrate future acquisitions may be unsuccessful or may be more difficult, time-consuming, or costly than expected;
  4. LCNB may incur increased loan charge-offs in the future and the allowance for credit losses may be inadequate;
  5. LCNB may face competitive loss of customers;
  6. 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;
  7. changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
  8. 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;
  9. LCNB may experience difficulties growing loan and deposit balances;
  10. 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;
  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 Coronavirus Aid, Relief, and Economic Security ("CARES") Act, 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, and the Tax Cuts and Jobs Act, 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.

LCNB Corp. and Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

06-30-2023

 

03-31-2023

 

12-31-2022

 

09-30-2022

 

06-30-2022

 

06-30-2023

 

06-30-2022

Condensed Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

18,703

 

 

17,918

 

 

17,719

 

 

16,704

 

 

 

16,208

 

 

 

36,621

 

 

 

31,330

 

Interest expense

 

4,526

 

 

3,976

 

 

1,511

 

 

1,260

 

 

 

1,041

 

 

 

8,502

 

 

 

1,940

 

Net interest income

 

14,177

 

 

13,942

 

 

16,208

 

 

15,444

 

 

 

15,167

 

 

 

28,119

 

 

 

29,390

 

Provision for (recovery of) credit losses

 

30

 

 

(57

)

 

(19

)

 

(157

)

 

 

377

 

 

 

(27

)

 

 

426

 

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

 

14,147

 

 

13,999

 

 

16,227

 

 

15,601

 

 

 

14,790

 

 

 

28,146

 

 

 

28,964

 

Non-interest income

 

3,646

 

 

3,581

 

 

3,629

 

 

3,581

 

 

 

3,528

 

 

 

7,227

 

 

 

7,078

 

Non-interest expense

 

12,078

 

 

12,525

 

 

12,065

 

 

12,350

 

 

 

11,469

 

 

 

24,603

 

 

 

23,719

 

Income before income taxes

 

5,715

 

 

5,055

 

 

7,791

 

 

6,832

 

 

 

6,849

 

 

 

10,770

 

 

 

12,323

 

Provision for income taxes

 

1,021

 

 

898

 

 

1,383

 

 

1,253

 

 

 

1,231

 

 

 

1,919

 

 

 

2,182

 

Net income

$

4,694

 

 

4,157

 

 

6,408

 

 

5,579

 

 

 

5,618

 

 

 

8,851

 

 

 

10,141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Income Statement Information

 

 

 

 

 

 

 

 

 

 

 

 

Amort/Accret income on acquired loans

$

 

 

74

 

 

249

 

 

144

 

 

 

61

 

 

 

74

 

 

 

127

 

Tax-equivalent net interest income

$

14,223

 

 

13,989

 

 

16,257

 

 

15,495

 

 

 

15,217

 

 

 

28,212

 

 

 

29,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.21

 

 

0.21

 

 

0.21

 

 

0.20

 

 

 

0.20

 

 

 

0.42

 

 

 

0.40

 

Basic earnings per common share

$

0.42

 

 

0.37

 

 

0.57

 

 

0.49

 

 

 

0.49

 

 

 

0.79

 

 

 

0.87

 

Diluted earnings per common share

$

0.42

 

 

0.37

 

 

0.57

 

 

0.49

 

 

 

0.49

 

 

 

0.79

 

 

 

0.87

 

Book value per share

$

18.20

 

 

18.22

 

 

17.82

 

 

17.31

 

 

 

17.84

 

 

 

18.20

 

 

 

17.84

 

Tangible book value per share

$

12.81

 

 

12.86

 

 

12.48

 

 

11.97

 

 

 

12.53

 

 

 

12.81

 

 

 

12.53

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

11,056,308

 

 

11,189,170

 

 

11,211,328

 

 

11,284,225

 

 

 

11,337,805

 

 

 

11,122,371

 

 

 

11,576,873

 

Diluted

 

11,056,308

 

 

11,189,170

 

 

11,211,328

 

 

11,284,225

 

 

 

11,337,805

 

 

 

11,122,371

 

 

 

11,576,873

 

Shares outstanding at period end

 

11,116,080

 

 

11,202,063

 

 

11,259,080

 

 

11,293,639

 

 

 

11,374,515

 

 

 

11,116,080

 

 

 

11,374,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.98

%

 

0.88

%

 

1.34

%

 

1.15

%

 

 

1.18

%

 

 

0.93

%

 

 

1.07

%

Return on average equity

 

9.22

%

 

8.33

%

 

12.90

%

 

10.80

%

 

 

10.96

%

 

 

8.78

%

 

 

9.48

%

Return on average tangible common equity

 

13.07

%

 

11.85

%

 

18.59

%

 

15.30

%

 

 

15.52

%

 

 

12.46

%

 

 

13.18

%

Dividend payout ratio

 

50.00

%

 

56.76

%

 

36.84

%

 

40.82

%

 

 

40.82

%

 

 

53.16

%

 

 

45.98

%

Net interest margin (tax equivalent)

 

3.28

%

 

3.28

%

 

3.77

%

 

3.54

%

 

 

3.54

%

 

 

3.28

%

 

 

3.45

%

Efficiency ratio (tax equivalent)

 

67.59

%

 

71.29

%

 

60.67

%

 

64.74

%

 

 

61.18

%

 

 

69.42

%

 

 

64.86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

26,020

 

 

31,876

 

 

22,701

 

 

29,460

 

 

 

31.815

 

 

 

 

 

Debt and equity securities

 

314,763

 

 

328,194

 

 

323,167

 

 

325,801

 

 

 

337,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

127,553

 

 

124,240

 

 

120,236

 

 

114,694

 

 

 

114,971

 

 

 

 

 

Commercial, secured by real estate

 

961,173

 

 

932,208

 

 

938,022

 

 

908,130

 

 

 

905,703

 

 

 

 

 

Residential real estate

 

312,338

 

 

303,051

 

 

305,575

 

 

316,669

 

 

 

315,930

 

 

 

 

 

Consumer

 

29,007

 

 

28,611

 

 

28,290

 

 

29,451

 

 

 

30,308

 

 

 

 

 

Agricultural

 

9,955

 

 

7,523

 

 

10,054

 

 

8,630

 

 

 

7,412

 

 

 

 

 

Other, including deposit overdrafts

 

69

 

 

62

 

 

81

 

 

52

 

 

 

81

 

 

 

 

 

Deferred net origination fees

 

(844

)

 

(865

)

 

(980

)

 

(937

)

 

 

(928

)

 

 

 

 

Loans, gross

 

1,439,251

 

 

1,394,830

 

 

1,401,278

 

 

1,376,689

 

 

 

1,373,477

 

 

 

 

 

Less allowance for credit losses on loans

 

7,956

 

 

7,858

 

 

5,646

 

 

5,644

 

 

 

5,833

 

 

 

 

 

Loans, net

$

1,431,295

 

 

1,386,972

 

 

1,395,632

 

 

1,371,045

 

 

 

1,367,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

06-30-2023

 

03-31-2023

 

12-31-2022

 

09-30-2022

 

06-30-2022

 

06-30-2023

 

06-30-2022

Selected Balance Sheet Items, continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses on Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses, beginning of period

$

7,858

 

 

5,646

 

 

5,644

 

 

5,833

 

 

 

5,530

 

 

 

 

 

Cumulative change in accounting principle; adoption of ASU 2016-13

 

 

 

2,196

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) credit losses

 

131

 

 

32

 

 

(19

)

 

(157

)

 

 

377

 

 

 

 

 

Losses charged off

 

(49

)

 

(36

)

 

(60

)

 

(53

)

 

 

(116

)

 

 

 

 

Recoveries

 

16

 

 

20

 

 

81

 

 

21

 

 

 

42

 

 

 

 

 

Allowance for credit losses, end of period

$

7,956

 

 

7,858

 

 

5,646

 

 

5,644

 

 

 

5,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets

$

1,756,157

 

 

1,736,829

 

 

1,726,902

 

 

1,714,196

 

 

$

1,722,853

 

 

 

 

 

Total assets

 

1,950,763

 

 

1,924,531

 

 

1,919,121

 

 

1,904,700

 

 

 

1,912,901

 

 

 

 

 

Total deposits

 

1,596,709

 

 

1,603,881

 

 

1,604,970

 

 

1,657,370

 

 

 

1,658,825

 

 

 

 

 

Short-term borrowings

 

112,289

 

 

76,500

 

 

71,455

 

 

4,000

 

 

 

5,000

 

 

 

 

 

Long-term debt

 

18,122

 

 

18,598

 

 

19,072

 

 

24,539

 

 

 

25,000

 

 

 

 

 

Total shareholders’ equity

 

202,316

 

 

204,072

 

 

200,675

 

 

195,439

 

 

 

202,960

 

 

 

 

 

Equity to assets ratio

 

10.37

%

 

10.60

%

 

10.46

%

 

10.26

%

 

 

10.61

%

 

 

 

 

Loans to deposits ratio

 

90.14

%

 

86.97

%

 

87.31

%

 

83.06

%

 

 

82.80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity (TCE)

$

142,362

 

 

144,006

 

 

140,498

 

 

135,149

 

 

 

142,557

 

 

 

 

 

Tangible common assets (TCA)

 

1,890,809

 

 

1,864,465

 

 

1,858,944

 

 

1,844,410

 

 

 

1,852,224

 

 

 

 

 

TCE/TCA

 

7.53

%

 

7.72

%

 

7.56

%

 

7.33

%

 

 

7.70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

30,742

 

 

35,712

 

 

24,330

 

 

35,763

 

 

$

28,787

 

 

$

33,205

 

 

$

30,788

 

Debt and equity securities

 

321,537

 

 

327,123

 

 

323,195

 

 

338,299

 

 

 

338,149

 

 

 

324,320

 

 

 

339,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

1,405,939

 

 

1,389,385

 

 

1,383,809

 

 

1,384,520

 

 

$

1,375,710

 

 

$

1,397,708

 

 

$

1,376,315

 

Less allowance for credit losses on loans

 

7,860

 

 

7,522

 

 

5,647

 

 

5,830

 

 

 

5,532

 

 

 

7,692

 

 

 

5,517

 

Net loans

$

1,398,079

 

 

1,381,863

 

 

1,378,162

 

 

1,378,690

 

 

$

1,370,178

 

 

$

1,390,016

 

 

$

1,370,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets

$

1,737,256

 

 

1,729,008

 

 

1,711,524

 

 

1,736,031

 

 

 

1,722,503

 

 

 

1,733,160

 

 

 

1,724,938

 

Total assets

 

1,927,957

 

 

1,921,742

 

 

1,903,338

 

 

1,928,868

 

 

 

1,912,574

 

 

 

1,925,004

 

 

 

1,915,051

 

Total deposits

 

1,604,346

 

 

1,583,857

 

 

1,637,201

 

 

1,669,932

 

 

 

1,655,389

 

 

 

1,594,159

 

 

 

1,651,032

 

Short-term borrowings

 

79,485

 

 

94,591

 

 

21,433

 

 

5,728

 

 

 

18,263

 

 

 

86,996

 

 

 

15,399

 

Long-term debt

 

18,514

 

 

18,983

 

 

23,855

 

 

24,920

 

 

 

12,637

 

 

 

18,747

 

 

 

11,326

 

Total shareholders’ equity

 

204,085

 

 

202,419

 

 

197,014

 

 

205,051

 

 

 

205,645

 

 

 

203,257

 

 

 

215,629

 

Equity to assets ratio

 

10.59

%

 

10.53

%

 

10.35

%

 

10.63

%

 

 

10.75

%

 

 

10.56

%

 

 

11.26

%

Loans to deposits ratio

 

87.63

%

 

87.72

%

 

84.52

%

 

82.91

%

 

 

83.10

%

 

 

87.68

%

 

 

83.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

$

33

 

 

16

 

 

(21

)

 

32

 

 

 

74

 

 

 

49

 

 

 

99

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans

$

454

 

 

701

 

 

391

 

 

465

 

 

 

599

 

 

 

454

 

 

 

599

 

Loans past due 90 days or more and still accruing

 

256

 

 

 

 

39

 

 

 

 

 

0

 

 

 

256

 

 

 

 

Total nonperforming loans

$

710

 

 

701

 

 

430

 

 

465

 

 

 

599

 

 

 

710

 

 

 

599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries) to average loans

 

0.01

%

 

0.00

%

 

(0.01

)%

 

0.01

%

 

 

0.02

%

 

 

0.01

%

 

 

0.03

%

Allowance for credit losses on loans to total loans

 

0.55

%

 

0.56

%

 

0.40

%

 

0.41

%

 

 

0.42

%

 

 

 

 

Nonperforming loans to total loans

 

0.05

%

 

0.05

%

 

0.03

%

 

0.03

%

 

 

0.04

%

 

 

 

 

Nonperforming assets to total assets

 

0.04

%

 

0.04

%

 

0.02

%

 

0.02

%

 

 

0.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

06-30-2023

 

03-31-2023

 

12-31-2022

 

09-30-2022

 

06-30-2022

 

06-30-2023

 

06-30-2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets Under Management

 

 

 

 

 

 

 

 

 

 

 

 

 

LCNB Corp. total assets

$

1,950,763

 

 

1,924,531

 

 

1,919,121

 

 

1,904,700

 

 

 

1,912,901

 

 

 

 

 

Trust and investments (fair value)

 

744,149

 

 

716,578

 

 

678,366

 

 

611,409

 

 

 

625,984

 

 

 

 

 

Mortgage loans serviced

 

143,093

 

 

142,167

 

 

148,412

 

 

145,317

 

 

 

153,557

 

 

 

 

 

Cash management

 

2,668

 

 

1,831

 

 

1,925

 

 

53,199

 

 

 

38,914

 

 

 

 

 

Brokerage accounts (fair value)

 

384,889

 

 

374,066

 

 

347,737

 

 

314,144

 

 

 

303,663

 

 

 

 

 

Total assets managed

 

3,225,562

 

 

3,159,173

 

 

3,095,561

 

 

3,028,769

 

 

 

3,035,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Net income

$

4,694

 

 

4,157

 

 

6,408

 

 

5,579

 

 

 

5,618

 

 

 

8,851

 

 

 

10,141

 

Merger-related costs

 

415

 

 

25

 

 

 

 

 

 

 

 

 

 

440

 

 

 

 

Tax effect

 

(63

)

 

(4

)

 

 

 

 

 

 

 

 

 

(67

)

 

 

 

Adjusted net income

$

5,046

 

 

4,178

 

 

6,408

 

 

5,579

 

 

 

5,618

 

 

 

9,224

 

 

 

10,141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basic and diluted earnings per share

$

0.45

 

 

0.37

 

 

0.57

 

 

0.49

 

 

 

0.49

 

 

 

0.82

 

 

 

0.87

 

Adjusted return on average assets

 

1.05

%

 

0.88

%

 

1.34

%

 

1.15

%

 

 

1.18

%

 

 

0.97

%

 

 

1.07

%

Adjusted return on average equity

 

9.92

%

 

8.37

%

 

12.90

%

 

10.80

%

 

 

10.96

%

 

 

9.15

%

 

 

9.48

%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

 

(Dollars in thousands)

 

June 30, 2023

(Unaudited)

 

December 31, 2022

ASSETS:

 

 

 

Cash and due from banks

$

23,877

 

 

20,244

 

Interest-bearing demand deposits

 

2,143

 

 

2,457

 

Total cash and cash equivalents

 

26,020

 

 

22,701

 

Investment securities:

 

 

 

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

 

1,279

 

 

2,273

 

Equity securities without a readily determinable fair value, at cost

 

2,099

 

 

2,099

 

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

 

281,156

 

 

289,850

 

Debt securities, held-to-maturity, at cost, net of allowance for credit losses

 

19,117

 

 

19,878

 

Federal Reserve Bank stock, at cost

 

4,652

 

 

4,652

 

Federal Home Loan Bank stock, at cost

 

6,460

 

 

4,415

 

Loans, net of allowance for credit losses

 

1,431,295

 

 

1,395,632

 

Premises and equipment, net

 

33,145

 

 

33,042

 

Operating leases right of use asset

 

6,260

 

 

6,525

 

Goodwill

 

59,221

 

 

59,221

 

Core deposit and other intangibles

 

1,497

 

 

1,827

 

Bank owned life insurance

 

44,846

 

 

44,298

 

Interest receivable

 

7,811

 

 

7,482

 

Other assets

 

25,905

 

 

25,503

 

TOTAL ASSETS

$

1,950,763

 

 

1,919,398

 

 

 

 

 

LIABILITIES:

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

480,288

 

 

505,824

 

Interest-bearing

 

1,116,421

 

 

1,099,146

 

Total deposits

 

1,596,709

 

 

1,604,970

 

Short-term borrowings

 

112,289

 

 

71,455

 

Long-term debt

 

18,122

 

 

19,072

 

Operating lease liabilities

 

6,434

 

 

6,647

 

Allowance for credit losses on off-balance sheet credit exposures

 

381

 

 

 

Accrued interest and other liabilities

 

14,512

 

 

16,579

 

TOTAL LIABILITIES

 

1,748,447

 

 

1,718,723

 

 

 

 

 

COMMITMENTS AND CONTINGENT LIABILITIES

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

Preferred shares – no par value, authorized 1,000,000 shares, none outstanding

 

123,422

 

 

122,839

 

Common shares –no par value, authorized 19,000,000; issued 14,327,463 and 14,270,550 shares at June 30, 2023 and December 31, 2022, respectively; outstanding 11,116,080 and 11,259,080 shares at March 31, 2023 and December 31, 2022, respectively

 

21,249

 

 

21,230

 

Retained earnings

 

141,431

 

 

139,249

 

Treasury shares at cost, 3,211,383 and 3,011,470 shares at June 30, 2023 and December 31, 2022, respectively

 

(56,015

)

 

(52,689

)

Accumulated other comprehensive loss, net of taxes

 

(27,771

)

 

(29,954

)

TOTAL SHAREHOLDERS' EQUITY

 

202,316

 

 

200,675

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,950,763

 

 

1,919,398

 

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,

 

2023

 

2022

 

2023

 

2022

INTEREST INCOME:

 

 

 

 

 

 

 

Interest and fees on loans

$

16,763

 

 

14,548

 

 

32,906

 

 

28,334

 

Dividends on equity securities with a readily determinable fair value

 

8

 

 

14

 

 

25

 

 

26

 

Dividends on equity securities without a readily determinable fair value

 

30

 

 

5

 

 

50

 

 

10

 

Interest on debt securities, taxable

 

1,323

 

 

1,254

 

 

2,666

 

 

2,349

 

Interest on debt securities, non-taxable

 

174

 

 

188

 

 

350

 

 

377

 

Other investments

 

405

 

 

199

 

 

624

 

 

234

 

TOTAL INTEREST INCOME

 

18,703

 

 

16,208

 

 

36,621

 

 

31,330

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

Interest on deposits

 

3,335

 

 

775

 

 

5,791

 

 

1,514

 

Interest on short-term borrowings

 

1,008

 

 

163

 

 

2,312

 

 

249

 

Interest on long-term debt

 

183

 

 

103

 

 

399

 

 

177

 

TOTAL INTEREST EXPENSE

 

4,526

 

 

1,041

 

 

8,502

 

 

1,940

 

NET INTEREST INCOME

 

14,177

 

 

15,167

 

 

28,119

 

 

29,390

 

Provision for credit losses on loans

 

132

 

 

377

 

 

164

 

 

426

 

Provision for (recovery of) credit losses on debt securities, held-to-maturity

 

(1

)

 

 

 

(1

)

 

 

Recovery of credit losses on off-balance sheet credit exposures

 

(101

)

 

 

 

(190

)

 

 

TOTAL PROVISION FOR (RECOVERY OF) CREDIT LOSSES

 

30

 

 

377

 

 

(27

)

 

426

 

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

 

14,147

 

 

14,790

 

 

28,146

 

 

28,964

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

Fiduciary income

 

1,787

 

 

1,643

 

 

3,527

 

 

3,338

 

Service charges and fees on deposit accounts

 

1,445

 

 

1,546

 

 

2,927

 

 

2,952

 

Bank owned life insurance income

 

277

 

 

269

 

 

548

 

 

534

 

Gains from sales of loans

 

3

 

 

64

 

 

9

 

 

188

 

Other operating income

 

134

 

 

6

 

 

216

 

 

66

 

TOTAL NON-INTEREST INCOME

 

3,646

 

 

3,528

 

 

7,227

 

 

7,078

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

Salaries and employee benefits

 

7,061

 

 

7,014

 

 

14,410

 

 

14,229

 

Equipment expenses

 

417

 

 

428

 

 

778

 

 

836

 

Occupancy expense, net

 

599

 

 

735

 

 

1,562

 

 

1,510

 

State financial institutions tax

 

396

 

 

437

 

 

793

 

 

873

 

Marketing

 

320

 

 

368

 

 

512

 

 

630

 

Amortization of intangibles

 

112

 

 

112

 

 

223

 

 

252

 

FDIC insurance premiums, net

 

224

 

 

134

 

 

439

 

 

260

 

Contracted services

 

666

 

 

679

 

 

1,307

 

 

1,289

 

Other real estate owned, net

 

1

 

 

(879

)

 

2

 

 

(879

)

Merger-related expenses

 

415

 

 

 

 

440

 

 

 

Other non-interest expense

 

1,867

 

 

2,441

 

 

4,137

 

 

4,719

 

TOTAL NON-INTEREST EXPENSE

 

12,078

 

 

11,469

 

 

24,603

 

 

23,719

 

INCOME BEFORE INCOME TAXES

 

5,715

 

 

6,849

 

 

10,770

 

 

12,323

 

PROVISION FOR INCOME TAXES

 

1,021

 

 

1,231

 

 

1,919

 

 

2,182

 

NET INCOME

$

4,694

 

 

5,618

 

 

8,851

 

 

10,141

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

 

0.42

 

 

0.49

 

 

0.79

 

 

0.87

 

Diluted

 

0.42

 

 

0.49

 

 

0.79

 

 

0.87

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

11,056,308

 

 

11,337,805

 

 

11,122,371

 

 

11,576,873

 

Diluted

 

11,056,308

 

 

11,337,805

 

 

11,122,371

 

 

11,576,873

 

 

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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