LCNB CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - January 29, 2019

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Exhibit 99.2

LCNB Corp. and Subsidiaries
Financial Highlights
(Dollars in thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
 
Year Ended
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
 
12/31/2017
 
12/31/2018
 
12/31/2017
Condensed Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
15,844

 
15,070

 
12,538

 
11,142

 
11,610

 
54,594

 
44,463

Interest expense
2,334

 
1,967

 
1,170

 
954

 
953

 
6,425

 
3,599

Net interest income
13,510

 
13,103

 
11,368

 
10,188

 
10,657

 
48,169

 
40,864

Provision for loan losses
(39
)
 
659

 
224

 
79

 
(10
)
 
923

 
215

Net interest income after provision
13,549

 
12,444

 
11,144

 
10,109

 
10,667

 
47,246

 
40,649

Non-interest income
2,702

 
2,921

 
2,791

 
2,636

 
2,579

 
11,050

 
10,458

Non-interest expense
9,925

 
10,317

 
10,711

 
9,549

 
8,612

 
40,502

 
33,863

Income before income taxes
6,326

 
5,048

 
3,224

 
3,196

 
4,634

 
17,794

 
17,244

Provision for income taxes
1,133

 
847

 
486

 
483

 
1,017

 
2,949

 
4,272

Net income
$
5,193

 
4,201

 
2,738

 
2,713

 
3,617

 
14,845

 
12,972

Amort/Accret income on acquired loans
$
229

 
198

 
44

 
96

 
606

 
567

 
1,096

Amort/Accret expenses on acquired interest-bearing liabilities
$
149

 
214

 
—

 
—

 
—

 
363

 
—

Tax-equivalent net interest income
$
13,680

 
13,279

 
11,549

 
10,375

 
11,062

 
48,883

 
42,549

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per Share Data
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends per share
$
0.17

 
0.16

 
0.16

 
0.16

 
0.16

 
0.65

 
0.64

Basic earnings per common share
$
0.40

 
0.32

 
0.25

 
0.27

 
0.37

 
1.24

 
1.30

Diluted earnings per common share
$
0.40

 
0.32

 
0.25

 
0.27

 
0.36

 
1.24

 
1.29

Book value per share
$
16.47

 
16.05

 
15.97

 
14.80

 
14.99

 
16.47

 
14.99

Tangible book value per share
$
11.67

 
11.23

 
11.14

 
11.47

 
11.64

 
11.67

 
11.64

Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
13,285,386

 
13,285,203

 
11,099,485

 
10,020,611

 
10,013,777

 
11,935,350

 
10,005,575

Diluted
13,290,499

 
13,290,665

 
11,105,014

 
10,028,588

 
10,020,566

 
11,942,253

 
10,012,511

Shares outstanding at period end
13,295,276

 
13,304,976

 
13,299,235

 
10,041,152

 
10,023,059

 
13,295,276

 
10,023,059

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Financial Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.27
 %
 
1.03
%
 
0.78
%
 
0.85
 %
 
1.11
 %
 
1.00
%
 
0.99
%
Return on average equity
9.55
 %
 
7.76
%
 
6.46
%
 
7.33
 %
 
9.49
 %
 
7.90
%
 
8.74
%
Dividend payout ratio
42.50
 %
 
50.00
%
 
64.00
%
 
59.26
 %
 
43.24
 %
 
52.42
%
 
49.23
%
Net interest margin (tax equivalent)
3.69
 %
 
3.59
%
 
3.63
%
 
3.59
 %
 
3.73
 %
 
3.63
%
 
3.58
%
Efficiency ratio (tax equivalent)
60.58
 %
 
63.69
%
 
74.69
%
 
73.39
 %
 
63.13
 %
 
67.58
%
 
63.88
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Balance Sheet Items
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
20,040

 
19,812

 
24,901

 
17,494

 
25,386

 
 
 
 
Debt and equity securities
282,813

 
299,786

 
311,047

 
310,009

 
317,413

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
77,740

 
78,002

 
81,778

 
37,118

 
36,057

 
 
 
 
Commercial, secured by real estate
740,647

 
704,987

 
705,978

 
542,890

 
527,947

 
 
 
 
Residential real estate
349,127

 
347,920

 
339,435

 
246,487

 
251,582

 
 
 
 
Consumer
17,283

 
17,505

 
17,705

 
17,176

 
17,450

 
 
 
 
  Agricultural
13,297

 
13,280

 
13,390

 
12,217

 
15,194

 
 
 
 
Other, including deposit overdrafts
450

 
498

 
583

 
506

 
539

 
 
 
 
Deferred net origination costs
79

 
133

 
229

 
263

 
291

 
 
 
 
  Loans, gross
1,198,623

 
1,162,325

 
1,159,098

 
856,657

 
849,060

 
 
 
 
Less allowance for loan losses
4,046

 
4,016

 
3,603

 
3,529

 
3,403

 
 
 
 
  Loans, net
$
1,194,577

 
1,158,309

 
1,155,495

 
853,128

 
845,657

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total earning assets
$
1,483,166

 
1,465,787

 
1,471,923

 
1,168,204

 
1,170,700

 
 
 
 
Total assets
1,636,927

 
1,620,299

 
1,631,442

 
1,288,791

 
1,295,638

 
 
 
 
Total deposits
1,300,919

 
1,371,023

 
1,380,884

 
1,123,463

 
1,085,821

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
Three Months Ended
 
Year Ended
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
 
12/31/2017
 
12/31/2018
 
12/31/2017
Selected Balance Sheet Items, continued
 
 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
56,230

 
0

 
0

 
0

 
47,000

 
 
 
 
Long-term debt
47,032

 
23,079

 
27,085

 
6,219

 
303

 
 
 
 
Total shareholders’ equity
218,985

 
213,515

 
212,366

 
148,584

 
150,271

 
 
 
 
Equity to assets ratio
13.38
 %
 
13.18
%
 
13.02
%
 
11.53
 %
 
11.60
 %
 
 
 
 
Loans to deposits ratio
92.14
 %
 
84.78
%
 
83.94
%
 
76.25
 %
 
78.20
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible common equity (TCE)
$
155,197

 
149,398

 
147,705

 
114,801

 
116,289

 
 
 
 
Tangible common assets (TCA)
1,573,139

 
1,556,182

 
1,566,781

 
1,255,008

 
1,261,656

 
 
 
 
TCE/TCA
9.87
 %
 
9.60
%
 
9.43
%
 
9.15
 %
 
9.22
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Average Balance Sheet Items
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
20,685

 
25,920

 
27,319

 
21,820

 
18,787

 
23,910

 
25,132

Debt and equity securities
291,433

 
304,112

 
306,366

 
313,689

 
332,225

 
303,839

 
358,682

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
$
1,177,061

 
1,155,846

 
961,726

 
853,152

 
840,526

 
1,038,159

 
822,452

Less allowance for loan losses
4,016

 
3,622

 
4,245

 
3,401

 
3,407

 
3,822

 
3,405

Net loans
$
1,173,045

 
1,152,224

 
957,481

 
849,751

 
837,119

 
1,034,337

 
819,047

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total earning assets
$
1,471,650

 
1,465,510

 
1,276,176

 
1,170,708

 
1,175,180

 
1,347,162

 
1,189,106

Total assets
1,626,029

 
1,623,016

 
1,409,698

 
1,292,375

 
1,295,293

 
1,488,941

 
1,309,501

Total deposits
1,333,673

 
1,367,950

 
1,212,104

 
1,114,979

 
1,096,966

 
1,258,075

 
1,125,866

Short-term borrowings
36,348

 
1,833

 
3,491

 
14,086

 
34,440

 
13,967

 
23,976

Long-term debt
25,536

 
25,757

 
13,252

 
2,255

 
323

 
16,789

 
421

Total shareholders’ equity
215,739

 
214,769

 
170,077

 
150,058

 
151,154

 
187,915

 
148,443

Equity to assets ratio
13.27
 %
 
13.23
%
 
12.06
%
 
11.61
 %
 
11.67
 %
 
12.62
%
 
11.34
%
Loans to deposits ratio
88.26
 %
 
84.49
%
 
79.34
%
 
76.52
 %
 
76.62
 %
 
82.52
%
 
73.05
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs (recoveries)
$
(68
)
 
245

 
150

 
(47
)
 
(7
)
 
280

 
387

Other real estate owned
244

 
35

 
35

 
—

 
—

 
244

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-accrual loans
2,956

 
2,603

 
4,065

 
2,744

 
2,965

 
2,956

 
2,965

Loans past due 90 days or more and still accruing
149

 
1

 
5

 
146

 
0

 
149

 
0

Total nonperforming loans
$
3,105

 
2,604

 
4,070

 
2,890

 
2,965

 
3,105

 
2,965

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs (recoveries) to average loans
(0.02
)%
 
0.08
%
 
0.06
%
 
(0.02
)%
 
0.00
 %
 
0.03
%
 
0.05
%
Allowance for loan losses to total loans
0.34
 %
 
0.35
%
 
0.31
%
 
0.41
 %
 
0.40
 %
 
0.34
%
 
0.40
%
Nonperforming loans to total loans
0.26
 %
 
0.22
%
 
0.35
%
 
0.34
 %
 
0.35
 %
 
0.26
%
 
0.35
%
Nonperforming assets to total assets
0.20
 %
 
0.16
%
 
0.25
%
 
0.22
 %
 
0.23
 %
 
0.20
%
 
0.23
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets Under Management
 
 
 
 
 
 
 
 
 
 
 
 
 
LCNB Corp. total assets
$
1,636,927

 
1,620,299

 
1,631,442

 
1,288,791

 
1,295,638

 
 
 
 
Trust and investments (fair value)
337,549

 
386,582

 
370,587

 
359,766

 
362,486

 
 
 
 
Mortgage loans serviced
97,685

 
115,647

 
114,536

 
90,630

 
92,818

 
 
 
 
Cash management
48,906

 
36,502

 
48,369

 
72,372

 
84,344

 
 
 
 
Brokerage accounts (fair value)
233,751

 
247,175

 
238,651

 
230,168

 
229,006

 
 
 
 
Total assets managed
$
2,354,818

 
2,406,205

 
2,403,585

 
2,041,727

 
2,064,292

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
5,193

 
4,201

 
2,738

 
2,713

 
3,617

 
14,845

 
12,972

Add: merger-related expenses, net of tax
148

 
274

 
710

 
621

 
87

 
1,753

 
87

Adjusted net income
$
5,341

 
4,475

 
3,448

 
3,334

 
3,704

 
16,598

 
13,059

Basic adjusted earnings per share
0.41

 
0.34

 
0.31

 
0.33

 
0.37

 
1.39

 
1.31

Diluted adjusted earnings per share
0.41

 
0.34

 
0.31

 
0.33

 
0.37

 
1.39

 
1.30

Adjusted return on average assets
1.30
 %
 
1.09
%
 
0.98
%
 
1.05
 %
 
1.16
 %
 
1.11
%
 
1.00
%
Adjusted return on average equity
9.82
 %
 
8.27
%
 
8.13
%
 
9.01
 %
 
9.94
 %
 
8.83
%
 
8.80
%




LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)
 
December 31, 2018 (Unaudited)
 
December 31, 2017
ASSETS:
 
 
 
Cash and due from banks
$
18,310

 
21,159

Interest-bearing demand deposits
1,730

 
4,227

Total cash and cash equivalents
20,040

 
25,386

Interest-bearing time deposits
996

 
—

Investment securities:
 

 
 

Equity securities with a readily determinable fair value, at fair value
2,078

 
2,160

Equity securities without a readily determinable fair value, at cost
2,099

 
1,099

Debt securities, available-for-sale, at fair value
238,421

 
275,213

Debt securities, held-to-maturity, at cost
29,721

 
32,571

Federal Reserve Bank stock, at cost
4,653

 
2,732

Federal Home Loan Bank stock, at cost
4,845

 
3,638

Loans, net
1,194,577

 
845,657

Premises and equipment, net
32,627

 
34,927

Goodwill
59,221

 
30,183

Core deposit and other intangibles
5,042

 
3,799

Bank owned life insurance
28,723

 
27,985

Other assets
13,884

 
10,288

TOTAL ASSETS
$
1,636,927

 
1,295,638

 
 
 
 
LIABILITIES:
 

 
 

Deposits:
 

 
 

Noninterest-bearing
$
322,571

 
283,212

Interest-bearing
978,348

 
802,609

Total deposits
1,300,919

 
1,085,821

Short-term borrowings
56,230

 
47,000

Long-term debt
47,032

 
303

Accrued interest and other liabilities
13,761

 
12,243

TOTAL LIABILITIES
1,417,942

 
1,145,367

 
 
 
 
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 December 31, 2018 and 2017; issued 14,070,303 and 10,776,686 shares at December 31, 2018 and 2017, respectively
141,170

 
76,977

Retained earnings
94,547

 
87,301

Treasury shares at cost, 775,027 and 753,627 shares at December 31, 2018 and 2017, respectively
(12,013
)
 
(11,665
)
Accumulated other comprehensive loss, net of taxes
(4,719
)
 
(2,342
)
TOTAL SHAREHOLDERS' EQUITY
218,985

 
150,271

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,636,927

 
1,295,638









LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
 
Three Months Ended 
December 31,
 
Year Ended 
December 31,
 
2018
 
2017
 
2018
 
2017
INTEREST INCOME:
 
 
 
 
 
 
 
Interest and fees on loans
$
14,010

 
9,738

 
47,489

 
36,571

Dividends on equity securities with a readily determinable fair value
17

 
19

 
65

 
63

Dividends on equity securities without a readily determinable fair value
17

 
9

 
39

 
26

Interest on debt securities, taxable
900

 
950

 
3,666

 
4,239

Interest on debt securities, non-taxable
641

 
753

 
2,686

 
3,130

Other short-term investments
259

 
141

 
649

 
434

TOTAL INTEREST INCOME
15,844

 
11,610

 
54,594

 
44,463

INTEREST EXPENSE:
 

 
 

 
 

 
 

Interest on deposits
1,976

 
839

 
5,753

 
3,378

Interest on short-term borrowings
223

 
112

 
311

 
209

Interest on long-term debt
135

 
2

 
361

 
12

TOTAL INTEREST EXPENSE
2,334

 
953

 
6,425

 
3,599

NET INTEREST INCOME
13,510

 
10,657

 
48,169

 
40,864

PROVISION FOR LOAN LOSSES
(39
)
 
(10
)
 
923

 
215

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
13,549

 
10,667

 
47,246

 
40,649

NON-INTEREST INCOME:
 

 
 

 
 

 
 

Fiduciary income
971

 
869

 
3,958

 
3,473

Service charges and fees on deposit accounts
1,420

 
1,350

 
5,590

 
5,236

Net gains (losses) on sales of securities
—

 
15

 
(8
)
 
233

Bank owned life insurance income
185

 
191

 
738

 
867

Gains from sales of loans
41

 
30

 
223

 
166

Other operating income
85

 
124

 
549

 
483

TOTAL NON-INTEREST INCOME
2,702

 
2,579

 
11,050

 
10,458

NON-INTEREST EXPENSE:
 

 
 

 
 

 
 

Salaries and employee benefits
5,488

 
4,678

 
21,279

 
18,585

Equipment expenses
341

 
336

 
1,138

 
1,172

Occupancy expense, net
742

 
724

 
2,861

 
2,613

State financial institutions tax
299

 
286

 
1,197

 
1,137

Marketing
321

 
232

 
1,119

 
873

Amortization of intangibles
263

 
189

 
922

 
751

FDIC insurance premiums
130

 
103

 
419

 
423

Contracted services
454

 
325

 
1,547

 
1,255

Other real estate owned
16

 
2

 
20

 
10

Merger-related expenses
164

 
108

 
2,123

 
118

Other non-interest expense
1,707

 
1,629

 
7,877

 
6,926

TOTAL NON-INTEREST EXPENSE
9,925

 
8,612

 
40,502

 
33,863

INCOME BEFORE INCOME TAXES
6,326

 
4,634

 
17,794

 
17,244

PROVISION FOR INCOME TAXES
1,133

 
1,017

 
2,949

 
4,272

NET INCOME
$
5,193

 
3,617

 
14,845

 
12,972

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.17

 
0.16

 
0.65

 
0.64

Earnings per common share:
 

 
 

 
 

 
 

Basic
0.40

 
0.37

 
1.24

 
1.30

Diluted
0.40

 
0.36

 
1.24

 
1.29

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
13,285,386

 
10,013,777

 
11,935,350

 
10,005,575

Diluted
13,290,499

 
10,020,566

 
11,942,253

 
10,012,511






Contacts
LCNB Corp.
Steve P. Foster, CEO, 800-344-BANK
Robert C. Haines II, Executive Vice President and CFO, 800-344-BANK



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