LCNB Corp. Reports Financial Results for the Three and Twelve Months Ended December 31, 2023

Profitability impacted primarily by one-time acquisition related operating and provision expenses and higher interest expense

Core profitability remains solid and supported by record annual non-interest income

Asset quality remains excellent with total nonperforming loans to total loans of 0.01% at December 31, 2023

LCNB successfully completed the Cincinnati Bancorp, Inc. acquisition on November 1, 2023

Eagle Financial Bancorp, Inc. acquisition expected to close during the 2024 second quarter

LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three and twelve months ended December 31, 2023.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, “I am pleased with the progress we made in 2023 executing our multi-year strategic growth plan, maintaining excellent asset quality, and returning additional capital back to our shareholders through our higher annual dividend, despite a challenging operating environment and restrictive Federal Reserve monetary policies. In November 2023, we successfully closed the Cincinnati Bancorp, Inc. (“Cincinnati Federal”) acquisition and announced the acquisition of Eagle Financial Bancorp, Inc. (“EFBI” or “Eagle”), the holding company for EAGLE.bank, which we expect to close during the 2024 second quarter. Upon completion of the EFBI transaction, LCNB will have 25 branches and $1.4 billion in deposits within the Cincinnati MSA, adding to LCNB’s position as one of the largest community banks in Southwest Ohio.

Mr. Meilstrup continued, “As expected, fourth-quarter profitability was impacted by one-time expenses associated with the Cincinnati Federal and EFBI acquisitions. While we expect one-time merger-related expenses will continue throughout the first half of 2024, we believe we are well positioned for earnings growth to reaccelerate in the fourth quarter of 2024. In addition, I am pleased with the core growth we experienced in 2023, as total assets, net loans, and total deposits all grew organically. This growth is a direct result of the efforts of our team members, our local presence in compelling Ohio and Kentucky markets, and the tremendous value we provide our communities. We also continued to see strong LCNB Wealth Management growth, which helped support record annual noninterest income in 2023. As we look to 2024, we believe it to be a year of continued investment and transformation that we expect will create the necessary platform to drive significant value for our shareholders in 2025 and beyond.”

Income Statement

For the 2023 fourth quarter, LCNB reported a net loss of $293,000, compared to net income of $6,408,000 for the same period last year. The Company reported a net loss per basic and diluted share for the 2023 fourth quarter of $0.02, compared to net income of $0.57 per basic and diluted share for the same period last year. Net income for the twelve-month period ended December 31, 2023, was $12,628,000, compared to $22,128,000 for the same period last year. Earnings per basic and diluted share for the twelve-month period ended December 31, 2023, were $1.10, compared to $1.93 for the same period last year.

Adjusted net income accounts for the impact of one-time merger-related expenses, net of tax, associated with the Cincinnati Federal and EFBI acquisitions. Adjusted net income for the 2023 fourth quarter was $4,241,000, or $0.34 per diluted share, compared to $6,408,000, or $0.57 per diluted share, for the same period last year. Adjusted net income for the twelve-month period ended December 31, 2023, was $17,834,000, or $1.56 per diluted share, compared to $22,128,000, or $1.93 per diluted share, in the prior year period.

Pre-tax, pre-provision net income, adjusted for one-time acquisition related expense, was $5,603,000 for the three months ended December 31, 2023, compared to $7,772,000 for the comparable period in 2022. For the twelve-month period ended December 31, 2023, pre-tax, pre-provision net income, adjusted for one-time acquisition related expense, was $21,993,000, compared to $27,196,000 for the same period a year ago.

Net interest income for the three months ended December 31, 2023, was $14,659,000, compared to $16,208,000 for the comparable period in 2022. Net interest income for the twelve-month period ended December 31, 2023, was $56,349,000, as compared to $61,042,000 in the same period last year. Contributing to the variances for both the three and twelve-month periods were increases in the amount of long and short-term borrowings combined with higher interest expense associated with the rapid year-over-year increase in the Effective Federal Funds Rate. An increase in interest income from loans due to increases in the volume of average loans outstanding and the average rates earned on these loans partially offset the borrowings and deposit interest expense-related variances. For the 2023 fourth quarter, LCNB’s tax equivalent net interest margin was 2.99%, compared to 3.77% for the same period last year. For the 2023 twelve-month period, LCNB’s tax equivalent net interest margin was 3.14%, compared to 3.55% for the same period last year.

Non-interest income for the three months ended December 31, 2023, was $4,606,000, compared to $3,629,000 for the same period last year. For the twelve months ended December 31, 2023, non-interest income increased $1,123,000, or by 7.9%, to $15,411,000, compared to $14,288,000 for the same period last year. The increase in non-interest income for the twelve-month period was primarily due to higher fiduciary income, a decrease in net losses recognized on equity securities, and higher gains on sales of loans, partially offset by decreased service charges and fees on deposit accounts.

Non-interest expense for the three months ended December 31, 2023, was $5,511,000 higher than the comparable period in 2022, primarily due to higher personnel and operating expenses primarily associated the integration of Cincinnati Federal and $3,914,000 of one-time expenses associated with the Cincinnati Federal and EFBI acquisitions. For the twelve months ended December 31, 2023, non-interest expense was $6,289,000 higher than the comparable period in 2022, partially due to $4,656,000 in acquisition-related expenses, and higher personnel and operating expenses primarily associated the integration of Cincinnati Federal. In addition, non-interest expense for the 2022 twelve-month period included $471,000 in losses from the sales of two office buildings as a result of the Company’s branch consolidation strategy, which was offset by an $889,000 gain from the sale of other real estate owned recognized during the 2022 second quarter.

Capital Allocation

During the twelve months ended December 31, 2023, 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 December 31, 2023, LCNB had 315,047 shares remaining under its February 2023 share repurchase program.

For the full year ended December 31, 2023, LCNB paid $0.85 per share in dividends, a 4.9% increase from $0.81 per share for the full year ended December 31, 2022. On November 20, 2023, LCNB’s Board of Directors approved a 4.8% increase in the Company’s regular quarterly cash dividend payment from $0.21 per share to $0.22 per share. LCNB’s regular cash dividend payment has increased 32.8% from $0.64 per share in 2017 to $0.85 per share in 2023.

Balance Sheet

Total assets at December 31, 2023 increased 19.4% to a record $2.29 billion from $1.92 billion at December 31, 2022. Net loans at December 31, 2023, increased 22.7% to a record $1.71 billion, compared to $1.40 billion at December 31, 2022. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Cincinnati Federal acquisition. Not including the Cincinnati Federal acquisition, total net loans increased 5.8% organically, or by $80.6 million from the same period a year ago.

Total deposits at December 31, 2023, increased 13.7% to $1.82 billion, compared to $1.60 billion at December 31, 2022. Not including the Cincinnati Federal acquisition, total deposits increased 0.6% organically, or by $8.9 million from December 31, 2022.

Assets Under Management

Total assets managed at December 31, 2023 were a record $3.88 billion, compared to $3.10 billion at December 31, 2022. The year-over-year increase in total assets managed was primarily due to the Cincinnati Federal acquisition, and organic growth in LCNB Corp. total assets, trust and investments, and brokerage accounts. Organically, trust and investments and brokerage accounts increased due to a higher number of new LCNB Wealth Management customer accounts opened during 2023 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 2023 fourth quarter, LCNB recorded a provision for credit losses of $2.2 million, compared to a total net recovery of credit losses of $19,000 for the 2022 fourth quarter. For the twelve months ended December 31, 2023, LCNB recorded a provision for credit losses of $2.1 million, compared to $250,000 for the twelve months ended December 31, 2022. Included in the provision for credit losses for the three and twelve months ended December 31, 2023 was a $1.7 million provision expense related to loans acquired through the Cincinnati Federal acquisition that were not considered purchased with credit deterioration ("non-PCD loans").

Net charge-offs for the 2023 fourth quarter were $102,000, or 0.02% of average loans, compared to net recoveries of $21,000, or 0.01% of average loans, for the same period last year. For the 2023 twelve-month period, net charge-offs were $184,000, or 0.01% of average loans, compared to net charge-offs of $110,000, or 0.01% of average loans, for the 2022 twelve-month period.

Total nonperforming loans, which include non-accrual loans and loans past due 90 days or more and still accruing interest, decreased $278,000 from $430,000 or 0.03% of total loans at December 31, 2022, to $152,000 or 0.01% of total loans at December 31, 2023. The nonperforming assets to total assets ratio was 0.01% at December 31, 2023, compared to 0.02% at December 31, 2022.

Merger Agreement with Eagle Financial Bancorp, Inc.

LCNB and EFBI (OTCQB: EFBI) signed a definitive merger agreement on November 29, 2023, whereby LCNB will acquire EFBI in a stock-and-cash transaction. EAGLE.bank operates three full-service banking offices in Cincinnati, Ohio.

Pursuant to the terms of the merger agreement, which has been approved by the Board of Directors of each company, EFBI shareholders will have the opportunity to elect to receive either 1.1401 shares of LCNB stock or $19.10 per share in cash for each share of EFBI common stock owned, subject to at least 60%, but not more than 70% of the shares of EFBI being exchanged for LCNB common stock. The transaction is anticipated to close during the second quarter of 2024. Closure is subject to customary closing conditions as described in the merger agreement, including receipt of certain regulatory approvals.

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, 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. LCNB’s ability to integrate 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 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, the Tax Cuts and Jobs Act, 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.

LCNB Corp. and Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

 

Three Months Ended

 

Twelve Months Ended

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

03-31-2023

 

12-31-2022

 

12-31-2023

 

12-31-2022

Condensed Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

23,310

 

 

 

19,668

 

 

 

18,703

 

 

 

17,918

 

 

 

17,719

 

 

79,599

 

 

65,753

 

Interest expense

 

8,651

 

 

 

6,097

 

 

 

4,526

 

 

 

3,976

 

 

 

1,511

 

 

23,250

 

 

4,711

 

Net interest income

 

14,659

 

 

 

13,571

 

 

 

14,177

 

 

 

13,942

 

 

 

16,208

 

 

56,349

 

 

61,042

 

Provision for (recovery of) credit losses

 

2,218

 

 

 

(114

)

 

 

30

 

 

 

(57

)

 

 

(19

)

 

2,077

 

 

250

 

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

 

12,441

 

 

 

13,685

 

 

 

14,147

 

 

 

13,999

 

 

 

16,227

 

 

54,272

 

 

60,792

 

Non-interest income

 

4,606

 

 

 

3,578

 

 

 

3,646

 

 

 

3,581

 

 

 

3,629

 

 

15,411

 

 

14,288

 

Non-interest expense

 

17,576

 

 

 

12,244

 

 

 

12,078

 

 

 

12,525

 

 

 

12,065

 

 

54,423

 

 

48,134

 

Income before income taxes

 

(529

)

 

 

5,019

 

 

 

5,715

 

 

 

5,055

 

 

 

7,791

 

 

15,260

 

 

26,946

 

Provision for (benefit from) income taxes

 

(236

)

 

 

949

 

 

 

1,021

 

 

 

898

 

 

 

1,383

 

 

2,632

 

 

4,818

 

Net income (loss)

$

(293

)

 

$

4,070

 

 

$

4,694

 

 

$

4,157

 

 

 

6,408

 

 

12,628

 

 

22,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Income Statement Information

 

 

 

 

 

 

 

 

 

 

 

 

Amort/Accret income on acquired loans

$

410

 

 

 

 

 

 

 

 

 

75

 

 

 

249

 

 

484

 

 

520

 

Tax-equivalent net interest income

$

14,703

 

 

 

13,617

 

 

 

14,223

 

 

 

13,989

 

 

 

16,257

 

 

56,532

 

 

61,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.22

 

 

 

0.21

 

 

 

0.21

 

 

 

0.21

 

 

 

0.21

 

 

0.85

 

 

0.81

 

Basic earnings (loss) per common share

$

(0.02

)

 

 

0.37

 

 

 

0.42

 

 

 

0.37

 

 

 

0.57

 

 

1.10

 

 

1.93

 

Diluted earnings (loss) per common share

$

(0.02

)

 

 

0.37

 

 

 

0.42

 

 

 

0.37

 

 

 

0.57

 

 

1.10

 

 

1.93

 

Book value per share

$

17.86

 

 

 

18.10

 

 

 

18.20

 

 

 

18.22

 

 

 

17.82

 

 

17.86

 

 

17.82

 

Tangible book value per share

$

11.16

 

 

 

12.72

 

 

 

12.81

 

 

 

12.86

 

 

 

12.48

 

 

11.16

 

 

12.48

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

12,378,289

 

 

 

11,038,720

 

 

 

11,056,308

 

 

 

11,189,170

 

 

 

11,211,328

 

 

11,417,857

 

 

11,410,981

 

Diluted

 

12,378,289

 

 

 

11,038,720

 

 

 

11,056,308

 

 

 

11,189,170

 

 

 

11,211,328

 

 

11,417,857

 

 

11,410,981

 

Shares outstanding at period end

 

13,173,569

 

 

 

11,123,382

 

 

 

11,116,080

 

 

 

11,202,063

 

 

 

11,259,080

 

 

13,173,569

 

 

11,259,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

(0.05

)%

 

 

0.82

%

 

 

0.98

%

 

 

0.88

%

 

 

1.34

%

 

0.63

%

 

1.16

%

Return on average equity

 

(0.53

)%

 

 

7.92

%

 

 

9.22

%

 

 

8.33

%

 

 

12.90

%

 

6.08

%

 

10.62

%

Return on average tangible common equity

 

(0.72

)%

 

 

11.21

%

 

 

13.07

%

 

 

11.85

%

 

 

18.59

%

 

8.54

%

 

14.96

%

Dividend payout ratio

 

NM

 

 

 

56.76

%

 

 

50.00

%

 

 

56.76

%

 

 

36.84

%

 

77.27

%

 

41.97

%

Net interest margin (tax equivalent)

 

2.99

%

 

 

3.04

%

 

 

3.28

%

 

 

3.28

%

 

 

3.77

%

 

3.14

%

 

3.55

%

Efficiency ratio (tax equivalent)

 

91.02

%

 

 

71.21

%

 

 

67.59

%

 

 

71.29

%

 

 

60.67

%

 

75.65

%

 

63.73

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

39,723

 

 

 

43,422

 

 

 

26,020

 

 

 

31,876

 

 

 

22,701

 

 

 

 

 

Debt and equity securities

 

318,723

 

 

 

309,094

 

 

 

314,763

 

 

 

328,194

 

 

 

323,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

120,411

 

 

 

125,751

 

 

 

127,553

 

 

 

124,240

 

 

 

120,236

 

 

 

 

 

Commercial, secured by real estate

 

1,107,556

 

 

 

981,787

 

 

 

961,173

 

 

 

932,208

 

 

 

938,022

 

 

 

 

 

Residential real estate

 

459,073

 

 

 

313,286

 

 

 

312,338

 

 

 

303,051

 

 

 

305,575

 

 

 

 

 

Consumer

 

25,578

 

 

 

27,018

 

 

 

29,007

 

 

 

28,611

 

 

 

28,290

 

 

 

 

 

Agricultural

 

10,952

 

 

 

11,278

 

 

 

9,955

 

 

 

7,523

 

 

 

10,054

 

 

 

 

 

Other, including deposit overdrafts

 

82

 

 

 

80

 

 

 

69

 

 

 

62

 

 

 

81

 

 

 

 

 

Deferred net origination fees

 

(181

)

 

 

(796

)

 

 

(844

)

 

 

(865

)

 

 

(980

)

 

 

 

 

Loans, gross

 

1,723,471

 

 

 

1,458,404

 

 

 

1,439,251

 

 

 

1,394,830

 

 

 

1,401,278

 

 

 

 

 

Less allowance for credit losses on loans

 

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

7,858

 

 

 

5,646

 

 

 

 

 

Loans, net

$

1,712,946

 

 

 

1,450,472

 

 

 

1,431,295

 

 

 

1,386,972

 

 

 

1,395,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"NM" - Not Meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

03-31-2023

 

12-31-2022

 

12-31-2023

 

12-31-2022

Selected Balance Sheet Items, continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses on Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses, beginning of period

$

7,932

 

 

 

7,956

 

 

 

7,858

 

 

 

5,646

 

 

 

5,644

 

 

 

 

 

Cumulative change in accounting principle - ASC 326

 

 

 

 

 

 

 

 

 

 

2,196

 

 

 

 

 

 

 

 

Fair value adjustment for purchased credit deteriorated loans

 

493

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (recovery of) credit losses

 

2,203

 

 

 

9

 

 

 

131

 

 

 

32

 

 

 

(19

)

 

 

 

 

Losses charged off

 

(126

)

 

 

(57

)

 

 

(49

)

 

 

(36

)

 

 

(60

)

 

 

 

 

Recoveries

 

23

 

 

 

24

 

 

 

16

 

 

 

20

 

 

 

81

 

 

 

 

 

Allowance for credit losses, end of period

$

10,525

 

 

 

7,932

 

 

 

7,956

 

 

 

7,858

 

 

 

5,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets

$

2,045,382

 

 

 

1,787,796

 

 

 

1,756,157

 

 

 

1,736,829

 

 

$

1,726,902

 

 

 

 

 

Total assets

 

2,291,592

 

 

 

1,981,668

 

 

 

1,950,763

 

 

 

1,924,808

 

 

 

1,919,398

 

 

 

 

 

Total deposits

 

1,824,389

 

 

 

1,616,890

 

 

 

1,596,709

 

 

 

1,603,881

 

 

 

1,604,970

 

 

 

 

 

Short-term borrowings

 

97,395

 

 

 

30,000

 

 

 

112,289

 

 

 

76,500

 

 

 

71,455

 

 

 

 

 

Long-term debt

 

113,123

 

 

 

112,641

 

 

 

18,122

 

 

 

18,598

 

 

 

19,072

 

 

 

 

 

Total shareholders’ equity

 

235,303

 

 

 

201,349

 

 

 

202,316

 

 

 

204,072

 

 

 

200,675

 

 

 

 

 

Equity to assets ratio

 

10.27

%

 

 

10.16

%

 

 

10.37

%

 

 

10.60

%

 

 

10.46

%

 

 

 

 

Loans to deposits ratio

 

94.47

%

 

 

90.20

%

 

 

90.14

%

 

 

86.97

%

 

 

87.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity (TCE)

$

146,999

 

 

 

141,508

 

 

 

142,362

 

 

 

144,006

 

 

 

140,489

 

 

 

 

 

Tangible common assets (TCA)

 

2,203,288

 

 

 

1,921,827

 

 

 

1,890,809

 

 

 

1,864,742

 

 

 

1,859,212

 

 

 

 

 

TCE/TCA

 

6.67

%

 

 

7.36

%

 

 

7.53

%

 

 

7.72

%

 

 

7.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

49,436

 

 

 

36,177

 

 

 

30,742

 

 

 

35,712

 

 

 

24,330

 

 

38,040

 

 

30,364

 

Debt and equity securities

 

310,274

 

 

 

313,669

 

 

 

321,537

 

 

 

327,123

 

 

 

323,195

 

 

318,082

 

 

335,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

1,622,911

 

 

 

1,451,153

 

 

 

1,405,939

 

 

 

1,389,385

 

 

 

1,383,809

 

 

1,467,981

 

 

1,380,272

 

Less allowance for credit losses on loans

 

8,826

 

 

 

7,958

 

 

 

7,860

 

 

 

7,522

 

 

 

5,647

 

 

8,046

 

 

5,629

 

Net loans

$

1,614,085

 

 

 

1,443,195

 

 

 

1,398,079

 

 

 

1,381,863

 

 

 

1,378,162

 

 

1,459,935

 

 

1,374,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total earning assets

$

1,952,121

 

 

 

1,775,713

 

 

 

1,737,256

 

 

 

1,729,008

 

 

 

1,711,524

 

 

1,799,102

 

 

1,724,350

 

Total assets

 

2,182,477

 

 

 

1,971,269

 

 

 

1,927,956

 

 

 

1,922,031

 

 

 

1,903,624

 

 

2,001,565

 

 

1,915,716

 

Total deposits

 

1,759,677

 

 

 

1,610,508

 

 

 

1,604,346

 

 

 

1,583,857

 

 

 

1,637,201

 

 

1,640,000

 

 

1,652,309

 

Short-term borrowings

 

64,899

 

 

 

63,018

 

 

 

79,485

 

 

 

94,591

 

 

 

21,433

 

 

75,383

 

 

14,482

 

Long-term debt

 

115,907

 

 

 

72,550

 

 

 

18,514

 

 

 

18,983

 

 

 

23,855

 

 

56,798

 

 

17,910

 

Total shareholders’ equity

 

220,678

 

 

 

203,967

 

 

 

204,085

 

 

 

202,419

 

 

 

197,014

 

 

207,827

 

 

208,271

 

Equity to assets ratio

 

10.11

%

 

 

10.35

%

 

 

10.59

%

 

 

10.53

%

 

 

10.35

%

 

10.38

%

 

10.87

%

Loans to deposits ratio

 

92.23

%

 

 

90.11

%

 

 

87.63

%

 

 

87.72

%

 

 

84.52

%

 

89.51

%

 

83.54

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

$

102

 

 

 

33

 

 

 

33

 

 

 

16

 

 

 

(21

)

 

184

 

 

110

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans

$

80

 

 

 

85

 

 

 

451

 

 

 

701

 

 

 

391

 

 

80

 

 

391

 

Loans past due 90 days or more and still accruing

 

72

 

 

 

176

 

 

 

256

 

 

 

 

 

 

39

 

 

72

 

 

39

 

Total nonperforming loans

$

152

 

 

 

261

 

 

 

707

 

 

 

701

 

 

 

430

 

 

152

 

 

430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries) to average loans

 

0.02

%

 

 

0.01

%

 

 

0.01

%

 

 

0.00

%

 

 

(0.01

)%

 

0.01

%

 

0.01

%

Allowance for credit losses on loans to total loans

 

0.61

%

 

 

0.54

%

 

 

0.55

%

 

 

0.56

%

 

 

0.40

%

 

 

 

 

Nonperforming loans to total loans

 

0.01

%

 

 

0.02

%

 

 

0.05

%

 

 

0.05

%

 

 

0.03

%

 

 

 

 

Nonperforming assets to total assets

 

0.01

%

 

 

0.01

%

 

 

0.04

%

 

 

0.04

%

 

 

0.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

12-31-2023

 

09-30-2023

 

06-30-2023

 

03-31-2023

 

12-31-2022

 

12-31-2023

 

12-31-2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets Under Management

 

 

 

 

 

 

 

 

 

 

 

 

 

LCNB Corp. total assets

$

2,291,592

 

 

 

1,981,668

 

 

 

1,950,763

 

 

 

1,924,808

 

 

 

1,919,398

 

 

 

 

 

Trust and investments (fair value)

 

806,770

 

 

 

731,342

 

 

 

744,149

 

 

 

716,578

 

 

 

678,366

 

 

 

 

 

Mortgage loans serviced

 

391,800

 

 

 

146,483

 

 

 

143,093

 

 

 

142,167

 

 

 

148,412

 

 

 

 

 

Cash management

 

2,375

 

 

 

2,445

 

 

 

2,668

 

 

 

1,831

 

 

 

1,925

 

 

 

 

 

Brokerage accounts (fair value)

 

392,390

 

 

 

368,854

 

 

 

384,889

 

 

 

374,066

 

 

 

347,737

 

 

 

 

 

Total assets managed

$

3,884,927

 

 

 

3,230,792

 

 

 

3,225,562

 

 

 

3,159,450

 

 

 

3,095,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Net income (loss)

$

(293

)

 

 

4,070

 

 

 

4,694

 

 

 

4,157

 

 

 

6,408

 

 

12,628

 

 

22,128

 

Merger expenses

 

3,914

 

 

 

302

 

 

 

415

 

 

 

25

 

 

 

 

 

4,656

 

 

 

Provision for credit losses on non-PCD loans

 

1,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,722

 

 

 

Tax effect

 

(1,102

)

 

 

(3

)

 

 

(63

)

 

 

(4

)

 

 

 

 

(1,172

)

 

 

Adjusted net income

$

4,241

 

 

 

4,369

 

 

 

5,046

 

 

 

4,178

 

 

 

6,408

 

 

17,834

 

 

22,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basic and diluted earnings per share

$

0.34

 

 

 

0.40

 

 

 

0.45

 

 

 

0.37

 

 

 

0.57

 

 

1.56

 

 

1.93

 

Adjusted return on average assets

 

0.77

%

 

 

0.88

%

 

 

1.05

%

 

 

0.88

%

 

 

1.34

%

 

0.89

%

 

1.16

%

Adjusted return on average equity

 

7.62

%

 

 

8.50

%

 

 

9.92

%

 

 

8.37

%

 

 

12.90

%

 

8.58

%

 

10.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Three Months Ended September 30,

 

 

2023

 

2022

 

2023

 

 

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)

 

$

1,622,911

 

 

21,113

 

5.16

%

 

$

1,383,809

 

 

15,887

 

4.55

%

 

$

1,451,153

 

 

17,875

 

4.89

%

Interest-bearing demand deposits

 

 

18,936

 

 

280

 

5.87

%

 

 

4,520

 

 

56

 

4.92

%

 

 

10,891

 

 

152

 

5.54

%

Federal Reserve Bank stock

 

 

4,930

 

 

144

 

11.59

%

 

 

4,652

 

 

140

 

11.94

%

 

 

4,652

 

 

 

%

Federal Home Loan Bank stock

 

 

12,607

 

 

273

 

8.59

%

 

 

4,106

 

 

66

 

6.38

%

 

 

7,007

 

 

134

 

7.59

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

4,415

 

 

62

 

5.57

%

 

 

4,353

 

 

29

 

2.64

%

 

 

3,382

 

 

38

 

4.46

%

Debt securities, taxable

 

 

265,736

 

 

1,273

 

1.90

%

 

 

283,442

 

 

1,355

 

1.90

%

 

 

274,494

 

 

1,296

 

1.87

%

Debt securities, non-taxable (2)

 

 

22,586

 

 

209

 

3.67

%

 

 

26,642

 

 

235

 

3.50

%

 

 

24,134

 

 

219

 

3.60

%

Total earnings assets

 

 

1,952,121

 

 

23,354

 

4.75

%

 

 

1,711,524

 

 

17,768

 

4.12

%

 

 

1,775,713

 

 

19,714

 

4.40

%

Non-earning assets

 

 

239,182

 

 

 

 

 

 

 

197,747

 

 

 

 

 

 

 

203,514

 

 

 

 

 

Allowance for credit losses

 

 

(8,826

)

 

 

 

 

 

 

(5,647

)

 

 

 

 

 

 

(7,958

)

 

 

 

 

Total assets

 

$

2,182,477

 

 

 

 

 

 

$

1,903,624

 

 

 

 

 

 

$

1,971,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand and money market deposits

 

$

574,349

 

 

2,710

 

1.87

%

 

$

520,158

 

 

610

 

0.47

%

 

$

541,487

 

 

2,298

 

1.68

%

Savings deposits

 

 

402,791

 

 

323

 

0.32

%

 

 

444,632

 

 

153

 

0.14

%

 

 

379,515

 

 

129

 

0.13

%

IRA and time certificates

 

 

302,434

 

 

3,321

 

4.36

%

 

 

150,175

 

 

426

 

1.13

%

 

 

230,030

 

 

1,999

 

3.45

%

Short-term borrowings

 

 

64,899

 

 

918

 

5.61

%

 

 

21,433

 

 

96

 

1.78

%

 

 

63,018

 

 

830

 

5.23

%

Long-term debt

 

 

115,907

 

 

1,379

 

4.72

%

 

 

23,855

 

 

226

 

3.76

%

 

 

72,550

 

 

841

 

4.60

%

Total interest-bearing liabilities

 

 

1,460,380

 

 

8,651

 

2.35

%

 

 

1,160,253

 

 

1,511

 

0.52

%

 

 

1,286,600

 

 

6,097

 

1.88

%

Demand deposits

 

 

480,103

 

 

 

 

 

 

 

522,236

 

 

 

 

 

 

 

459,476

 

 

 

 

 

Other liabilities

 

 

21,316

 

 

 

 

 

 

 

24,121

 

 

 

 

 

 

 

21,226

 

 

 

 

 

Equity

 

 

220,678

 

 

 

 

 

 

 

197,014

 

 

 

 

 

 

 

203,967

 

 

 

 

 

Total liabilities and equity

 

$

2,182,477

 

 

 

 

 

 

$

1,903,624

 

 

 

 

 

 

$

1,971,269

 

 

 

 

 

Net interest rate spread (3)

 

 

 

 

 

2.40

%

 

 

 

 

 

3.60

%

 

 

 

 

 

2.52

%

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

 

 

 

14,703

 

2.99

%

 

 

 

16,257

 

3.77

%

 

 

 

13,617

 

3.04

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

133.67

%

 

 

 

 

 

 

147.51

%

 

 

 

 

 

 

138.02

%

 

 

 

 

(1)

Includes non-accrual loans.

(2)

Income from tax-exempt securities is included in interest income on a taxable-equivalent basis. Interest income has been divided

(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.

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

 

December 31,

2023

(Unaudited)

 

December 31,

2022

ASSETS:

 

 

 

Cash and due from banks

$

36,535

 

 

 

20,244

 

Interest-bearing demand deposits

 

3,188

 

 

 

2,457

 

Total cash and cash equivalents

 

39,723

 

 

 

22,701

 

Investment securities:

 

 

 

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

 

1,336

 

 

 

2,273

 

Equity securities without a readily determinable fair value, at cost

 

3,666

 

 

 

2,099

 

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

 

276,601

 

 

 

289,850

 

Debt securities, held-to-maturity, at cost, net

 

16,858

 

 

 

19,878

 

Federal Reserve Bank stock, at cost

 

5,086

 

 

 

4,652

 

Federal Home Loan Bank stock, at cost

 

15,176

 

 

 

4,415

 

Loans, net

 

1,712,946

 

 

 

1,395,632

 

Premises and equipment, net

 

36,302

 

 

 

33,042

 

Operating lease right-of-use assets

 

6,000

 

 

 

6,525

 

Goodwill

 

79,509

 

 

 

59,221

 

Core deposit and other intangibles, net

 

9,494

 

 

 

1,827

 

Bank-owned life insurance

 

49,847

 

 

 

44,298

 

Interest receivable

 

8,405

 

 

 

7,482

 

Other assets, net

 

30,643

 

 

 

25,503

 

TOTAL ASSETS

$

2,291,592

 

 

 

1,919,398

 

 

 

 

 

LIABILITIES:

 

 

 

Deposits:

 

 

 

Noninterest-bearing

$

462,267

 

 

 

505,824

 

Interest-bearing

 

1,362,122

 

 

 

1,099,146

 

Total deposits

 

1,824,389

 

 

 

1,604,970

 

Short-term borrowings

 

97,395

 

 

 

71,455

 

Long-term debt

 

113,123

 

 

 

19,072

 

Operating lease liabilities

 

6,261

 

 

 

6,647

 

Accrued interest and other liabilities

 

15,121

 

 

 

16,579

 

TOTAL LIABILITIES

 

2,056,289

 

 

 

1,718,723

 

 

 

 

 

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 16,384,952 and 14,270,550 shares at December 31, 2023 and December 31, 2022, respectively; outstanding 13,173,569 and 11,259,080 shares at December 31, 2023 and December 31, 2022, respectively

 

173,637

 

 

 

144,069

 

Retained earnings

 

140,017

 

 

 

139,249

 

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

 

(56,015

)

 

 

(52,689

)

Accumulated other comprehensive loss, net of taxes

 

(22,336

)

 

 

(29,954

)

TOTAL SHAREHOLDERS' EQUITY

 

235,303

 

 

 

200,675

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

2,291,592

 

 

$

1,919,398

 

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

2023

 

2022

 

2023

 

2022

INTEREST INCOME:

 

 

 

 

 

 

 

Interest and fees on loans

$

21,113

 

 

15,887

 

 

71,894

 

59,247

 

Dividends on equity securities:

 

 

 

 

 

 

 

With a readily determinable fair value

 

9

 

 

16

 

 

43

 

56

 

Without a readily determinable fair value

 

53

 

 

13

 

 

132

 

29

 

Interest on debt securities:

 

 

 

 

 

 

 

Taxable

 

1,273

 

 

1,355

 

 

5,235

 

5,027

 

Non-taxable

 

165

 

 

186

 

 

688

 

753

 

Other investments

 

697

 

 

262

 

 

1,607

 

641

 

TOTAL INTEREST INCOME

 

23,310

 

 

17,719

 

 

79,599

 

65,753

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

Interest on deposits

 

6,354

 

 

1,189

 

 

16,571

 

3,682

 

Interest on short-term borrowings

 

918

 

 

96

 

 

4,060

 

416

 

Interest on long-term debt

 

1,379

 

 

226

 

 

2,619

 

613

 

TOTAL INTEREST EXPENSE

 

8,651

 

 

1,511

 

 

23,250

 

4,711

 

NET INTEREST INCOME

 

14,659

 

 

16,208

 

 

56,349

 

61,042

 

 

 

 

 

 

 

 

 

PROVISION FOR (RECOVERY OF) CREDIT LOSSES

 

2,218

 

 

(19

)

 

2,077

 

250

 

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

 

12,441

 

 

16,227

 

 

54,272

 

60,792

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

Fiduciary income

 

1,828

 

 

1,617

 

 

7,091

 

6,468

 

Service charges and fees on deposit accounts

 

1,532

 

 

1,532

 

 

5,856

 

6,190

 

Bank-owned life insurance income

 

306

 

 

271

 

 

1,136

 

1,074

 

Gains from sales of loans

 

659

 

 

8

 

 

697

 

196

 

Other operating income

 

281

 

 

201

 

 

631

 

360

 

TOTAL NON-INTEREST INCOME

 

4,606

 

 

3,629

 

 

15,411

 

14,288

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

Salaries and employee benefits

 

7,654

 

 

7,192

 

 

29,108

 

28,483

 

Equipment expenses

 

441

 

 

395

 

 

1,616

 

1,629

 

Occupancy expense, net

 

934

 

 

767

 

 

3,301

 

3,067

 

State financial institutions tax

 

439

 

 

428

 

 

1,628

 

1,740

 

Marketing

 

366

 

 

339

 

 

1,101

 

1,184

 

Amortization of intangibles

 

196

 

 

113

 

 

532

 

478

 

FDIC insurance premiums, net

 

269

 

 

133

 

 

932

 

530

 

Contracted services

 

798

 

 

601

 

 

2,776

 

2,503

 

Other real estate owned, net

 

1

 

 

8

 

 

4

 

(866

)

Merger-related expenses

 

3,914

 

 

 

 

4,656

 

 

Other non-interest expense

 

2,564

 

 

2,089

 

 

8,769

 

9,386

 

TOTAL NON-INTEREST EXPENSE

 

17,576

 

 

12,065

 

 

54,423

 

48,134

 

INCOME BEFORE INCOME TAXES

 

(529

)

 

7,791

 

 

15,260

 

26,946

 

PROVISION FOR (BENEFIT FROM) INCOME TAXES

 

(236

)

 

1,383

 

 

2,632

 

4,818

 

NET INCOME

$

(293

)

 

6,408

 

 

12,628

 

22,128

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

$

(0.02

)

 

0.57

 

 

1.10

 

1.93

 

Diluted

$

(0.02

)

 

0.57

 

 

1.10

 

1.93

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

12,378,289

 

 

11,211,328

 

 

11,417,857

 

11,410,981

 

Diluted

 

12,378,289

 

 

11,211,328

 

 

11,417,857

 

11,410,981

 

 

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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