LCNB CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 20, 2020

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Exhibit 99.2

LCNB Corp. and Subsidiaries
Financial Highlights
(Dollars in thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
 
3/31/2020
 
12/31/2019
 
9/30/2019
 
6/30/2019
 
3/31/2019
Condensed Income Statement
 
 
 
 
 
 
 
 
 
Interest income
$
16,556

 
16,424

 
16,329

 
16,328

 
16,113

Interest expense
2,378

 
2,577

 
2,751

 
2,738

 
2,722

Net interest income
14,178

 
13,847

 
13,578

 
13,590

 
13,391

Provision (credit) for loan losses
1,173

 
(6
)
 
264

 
54

 
(105
)
Net interest income after provision
13,005

 
13,853

 
13,314

 
13,536

 
13,496

Non-interest income
3,839

 
3,222

 
3,356

 
2,998

 
2,772

Non-interest expense
11,072

 
11,007

 
10,982

 
10,833

 
10,700

Income before income taxes
5,772

 
6,068

 
5,688

 
5,701

 
5,568

Provision for income taxes
746

 
1,238

 
961

 
973

 
941

Net income
$
5,026

 
4,830

 
4,727

 
4,728

 
4,627

Amort/Accret income on acquired loans
$
667

 
400

 
302

 
355

 
224

Amort/Accret expenses on acquired interest-bearing liabilities
$
3

 
3

 
4

 
142

 
144

Tax-equivalent net interest income
$
14,254

 
13,937

 
13,679

 
13,700

 
13,536

 
 
 
 
 
 
 
 
 
 
Per Share Data
 
 
 
 
 
 
 
 
 
Dividends per share
$
0.18

 
0.18

 
0.17

 
0.17

 
0.17

Basic earnings per common share
$
0.39

 
0.37

 
0.36

 
0.36

 
0.35

Diluted earnings per common share
$
0.39

 
0.37

 
0.36

 
0.36

 
0.35

Book value per share
$
18.00

 
17.63

 
17.44

 
17.18

 
16.83

Tangible book value per share
$
13.18

 
12.78

 
12.57

 
12.31

 
12.05

Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
12,926,077

 
12,912,106

 
12,932,950

 
13,192,691

 
13,283,634

Diluted
12,927,666

 
12,916,000

 
12,937,145

 
13,196,665

 
13,287,338

Shares outstanding at period end
12,969,076

 
12,936,783

 
12,927,463

 
12,978,554

 
13,314,148

 
 
 
 
 
 
 
 
 
 
Selected Financial Ratios
 
 
 
 
 
 
 
 
 
Return on average assets
1.23
%
 
1.17
%
 
1.13
%
 
1.16
%
 
1.15
 %
Return on average equity
8.75
%
 
8.42
%
 
8.33
%
 
8.46
%
 
8.47
 %
Dividend payout ratio
46.15
%
 
48.65
%
 
47.22
%
 
47.22
%
 
48.57
 %
Net interest margin (tax equivalent)
3.92
%
 
3.76
%
 
3.67
%
 
3.72
%
 
3.71
 %
Efficiency ratio (tax equivalent)
61.19
%
 
64.15
%
 
64.47
%
 
64.87
%
 
65.61
 %
 
 
 
 
 
 
 
 
 
 
Selected Balance Sheet Items
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
24,795

 
20,765

 
22,826

 
23,185

 
19,527

Debt and equity securities
183,123

 
219,791

 
239,730

 
246,701

 
264,559

 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
85,356

 
78,306

 
71,576

 
79,513

 
79,725

Commercial, secured by real estate
829,461

 
804,953

 
797,842

 
793,863

 
764,424

Residential real estate
318,009

 
322,533

 
320,703

 
326,029

 
334,227

Consumer
28,955

 
25,232

 
23,918

 
19,649

 
17,409

  Agricultural
10,519

 
11,509

 
11,525

 
10,843

 
10,900

Other, including deposit overdrafts
436

 
1,193

 
456

 
373

 
409

Deferred net origination costs (fees)
(349
)
 
(275
)
 
(128
)
 
(9
)
 
40

  Loans, gross
1,272,387

 
1,243,451

 
1,225,892

 
1,230,261

 
1,207,134

Less allowance for loan losses
5,008

 
4,045

 
4,167

 
4,112

 
4,126

  Loans, net
$
1,267,379

 
1,239,406

 
1,221,725

 
1,226,149

 
1,203,008

 
 
 
 
 
 
 
 
 
 
Total earning assets
$
1,462,485

 
1,466,988

 
1,470,074

 
1,482,913

 
1,476,862

Total assets
1,636,280

 
1,639,308

 
1,644,447

 
1,642,012

 
1,632,387

Total deposits
1,345,872

 
1,348,280

 
1,355,383

 
1,357,959

 
1,347,857

 
 
 
 
 
 
 
 
 
 




 
Three Months Ended
 
3/31/2020
 
12/31/2019
 
9/30/2019
 
6/30/2019
 
3/31/2019
Selected Balance Sheet Items, continued
 
 
 
 
 
 
 
 
Long-term debt
35,996

 
40,994

 
41,990

 
41,986

 
42,982

Total shareholders’ equity
233,478

 
228,048

 
225,492

 
222,972

 
224,018

Equity to assets ratio
14.27
%
 
13.91
%
 
13.71
%
 
13.58
%
 
13.72
 %
Loans to deposits ratio
94.54
%
 
92.22
%
 
90.45
%
 
90.60
%
 
89.56
 %
 
 
 
 
 
 
 
 
 
 
Tangible common equity (TCE)
$
170,994

 
165,304

 
162,485

 
159,702

 
160,488

Tangible common assets (TCA)
1,573,796

 
1,576,564

 
1,581,440

 
1,578,742

 
1,568,857

TCE/TCA
10.87
%
 
10.49
%
 
10.27
%
 
10.12
%
 
10.23
 %
 
 
 
 
 
 
 
 
 
 
Selected Average Balance Sheet Items
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
25,101

 
26,501

 
28,293

 
29,523

 
25,080

Debt and equity securities
204,912

 
231,115

 
243,553

 
249,954

 
266,081

 
 
 
 
 
 
 
 
 
 
Loans
$
1,252,554

 
1,230,845

 
1,227,806

 
1,217,726

 
1,208,809

Less allowance for loan losses
3,938

 
4,076

 
3,986

 
4,088

 
4,074

Net loans
$
1,248,616

 
1,226,769

 
1,223,820

 
1,213,638

 
1,204,735

 
 
 
 
 
 
 
 
 
 
Total earning assets
$
1,462,946

 
1,469,469

 
1,480,096

 
1,479,225

 
1,480,634

Total assets
1,638,486

 
1,643,793

 
1,654,034

 
1,637,645

 
1,635,416

Total deposits
1,346,770

 
1,352,101

 
1,365,702

 
1,352,449

 
1,333,529

Short-term borrowings
1,415

 
622

 
468

 
243

 
23,235

Long-term debt
38,325

 
41,742

 
41,988

 
42,567

 
44,676

Total shareholders’ equity
231,058

 
227,595

 
225,216

 
224,203

 
221,470

Equity to assets ratio
14.10
%
 
13.85
%
 
13.62
%
 
13.69
%
 
13.54
 %
Loans to deposits ratio
93.00
%
 
91.03
%
 
89.90
%
 
90.04
%
 
90.65
 %
 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
Net charge-offs (recoveries)
$
210

 
115

 
209

 
68

 
(185
)
Other real estate owned
0

 
197

 
197

 
197

 
244

 
 
 
 
 
 
 
 
 
 
Non-accrual loans
2,829

 
3,210

 
3,523

 
2,962

 
2,845

Loans past due 90 days or more and still accruing
39

 
—

 
—

 
24

 
177

Total nonperforming loans
$
2,868

 
3,210

 
3,523

 
2,986

 
3,022

 
 
 
 
 
 
 
 
 
 
Net charge-offs (recoveries) to average loans
0.07
%
 
0.04
%
 
0.07
%
 
0.02
%
 
(0.06
)%
Allowance for loan losses to total loans
0.39
%
 
0.33
%
 
0.34
%
 
0.33
%
 
0.34
 %
Nonperforming loans to total loans
0.23
%
 
0.26
%
 
0.29
%
 
0.24
%
 
0.25
 %
Nonperforming assets to total assets
0.18
%
 
0.21
%
 
0.23
%
 
0.19
%
 
0.20
 %
 
 
 
 
 
 
 
 
 
 
Assets Under Management
 
 
 
 
 
 
 
 
 
LCNB Corp. total assets
$
1,636,280

 
1,639,308

 
1,644,447

 
1,642,012

 
1,632,387

Trust and investments (fair value)
455,974

 
435,664

 
411,724

 
382,462

 
367,649

Mortgage loans serviced
94,805

 
93,596

 
90,784

 
88,444

 
89,049

Cash management
77,471

 
75,948

 
117,530

 
71,973

 
55,981

Brokerage accounts (fair value)
235,278

 
268,059

 
262,038

 
260,202

 
245,758

Total assets managed
$
2,499,808

 
2,512,575

 
2,526,523

 
2,445,093

 
2,390,824

 
 
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
Net income
$
5,026

 
4,830

 
4,727

 
4,728

 
4,627

Add: merger-related expenses, net of tax
0

 
0

 
21

 
16

 
53

Adjusted net income
$
5,026

 
4,830

 
4,748

 
4,744

 
4,680

Basic adjusted earnings per share
0.39

 
0.37

 
0.37

 
0.36

 
0.36

Diluted adjusted earnings per share
0.39

 
0.37

 
0.37

 
0.36

 
0.36

Adjusted return on average assets
1.23
%
 
1.17
%
 
1.14
%
 
1.16
%
 
1.16
 %
Adjusted return on average equity
8.75
%
 
8.42
%
 
8.36
%
 
8.49
%
 
8.57
 %




LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)
 
March 31, 2020 (Unaudited)
 
December 31, 2019
ASSETS:
 
 
 
Cash and due from banks
$
17,820

 
17,019

Interest-bearing demand deposits
6,975

 
3,746

Total cash and cash equivalents
24,795

 
20,765

Investment securities:
 

 
 

Equity securities with a readily determinable fair value, at fair value
2,036

 
2,312

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

 
2,099

Debt securities, available-for-sale, at fair value
141,439

 
178,000

Debt securities, held-to-maturity, at cost
27,694

 
27,525

Federal Reserve Bank stock, at cost
4,652

 
4,652

Federal Home Loan Bank stock, at cost
5,203

 
5,203

Loans, net
1,267,379

 
1,239,406

Premises and equipment, net
35,017

 
34,787

Operating leases right of use asset
5,621

 
5,444

Goodwill
59,221

 
59,221

Core deposit and other intangibles
3,751

 
4,006

Bank owned life insurance
41,309

 
41,667

Other assets
16,064

 
14,221

TOTAL ASSETS
$
1,636,280

 
1,639,308

 
 
 
 
LIABILITIES:
 

 
 

Deposits:
 

 
 

Noninterest-bearing
$
342,442

 
354,391

Interest-bearing
1,003,430

 
993,889

Total deposits
1,345,872

 
1,348,280

Long-term debt
35,996

 
40,994

Operating leases liability
5,659

 
5,446

Accrued interest and other liabilities
15,275

 
16,540

TOTAL LIABILITIES
1,402,802

 
1,411,260

 
 
 
 
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 March 31, 2020 and December 31, 2019; issued 14,144,103 and 14,111,810 shares at March 31, 2020 and December 31, 2019, respectively
142,046

 
141,791

Retained earnings
107,123

 
104,431

Treasury shares at cost, 1,175,027 shares at March 31, 2020 and December 31, 2019
(18,847
)
 
(18,847
)
Accumulated other comprehensive income, net of taxes
3,156

 
673

TOTAL SHAREHOLDERS' EQUITY
233,478

 
228,048

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,636,280

 
1,639,308







LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
 
Three Months Ended 
March 31,
 
2020
 
2019
INTEREST INCOME:
 
 
 
Interest and fees on loans
$
15,227

 
14,538

Dividends on equity securities with a readily determinable fair value
14

 
17

Dividends on equity securities without a readily determinable fair value
16

 
16

Interest on debt securities, taxable
950

 
869

Interest on debt securities, non-taxable
285

 
544

Interest on interest-bearing time deposits
—

 
5

Other investments
64

 
124

TOTAL INTEREST INCOME
16,556

 
16,113

INTEREST EXPENSE:
 

 
 

Interest on deposits
2,117

 
2,286

Interest on short-term borrowings
7

 
219

Interest on long-term debt
254

 
217

TOTAL INTEREST EXPENSE
2,378

 
2,722

NET INTEREST INCOME
14,178

 
13,391

PROVISION (CREDIT) FOR LOAN LOSSES
1,173

 
(105
)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
13,005

 
13,496

NON-INTEREST INCOME:
 

 
 

Fiduciary income
1,103

 
1,034

Service charges and fees on deposit accounts
1,295

 
1,308

Net gains (losses) on sales of debt securities
221

 
(18
)
Bank owned life insurance income
601

 
182

Gains from sales of loans
120

 
29

Other operating income
499

 
237

TOTAL NON-INTEREST INCOME
3,839

 
2,772

NON-INTEREST EXPENSE:
 

 
 

Salaries and employee benefits
6,768

 
6,162

Equipment expenses
287

 
266

Occupancy expense, net
682

 
763

State financial institutions tax
436

 
438

Marketing
177

 
302

Amortization of intangibles
260

 
257

FDIC insurance premiums (credit), net
(1
)
 
126

Contracted services
402

 
464

Other real estate owned
(10
)
 
3

Merger-related expenses
—

 
67

Other non-interest expense
2,071

 
1,852

TOTAL NON-INTEREST EXPENSE
11,072

 
10,700

INCOME BEFORE INCOME TAXES
5,772

 
5,568

PROVISION FOR INCOME TAXES
746

 
941

NET INCOME
$
5,026

 
4,627

 
 
 
 
Dividends declared per common share
$
0.18

 
0.17

Earnings per common share:
 

 
 

Basic
0.39

 
0.35

Diluted
0.39

 
0.35

Weighted average common shares outstanding:
 
 
 
Basic
12,926,077

 
13,283,634

Diluted
12,927,666

 
13,287,338






Contacts
LCNB Corp.
Eric J. Meilstrup, CEO and President, 800-344-BANK
Robert C. Haines II, Executive Vice President and CFO, 800-344-BANK



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