LCNB Corp. Reports Financial Results for the Three and Nine Months Ended September 30, 2023

Rhea-AI Summary

LCNB Corp. reported stable deposit base and a 90.20% loan-to-deposit ratio for Q3 2023. Net loans increased 5.8% YoY to a record $1.45 billion. Asset quality remains excellent with total nonperforming loans at 0.02% of total loans. LCNB Wealth Management assets grew 18.9% YoY to $1.10 billion. Acquisition of Cincinnati Bancorp, Inc. expected to close in November 2023.

Positive

• LCNB achieved solid growth with a 4.0% increase in total assets to a record $1.98 billion. Net loans increased by 5.8% YoY to reach $1.45 billion. LCNB Wealth Management assets grew by 18.9% YoY to $1.10 billion. The acquisition of Cincinnati Bancorp is expected to enhance LCNB's long-term profitability by expanding its presence in the Cincinnati market and offering more financial products to customers.

Negative

• The cost of funds and profitability have been impacted by significant competition for deposits and higher levels of borrowings. These trends are expected to continue over the near term.

Ended the Third Quarter with a Stable Deposit Base and a 90.20% Loan-to-Deposit Ratio

Net Loans Increased 5.8% Year-over-Year to a Record of $1.45 Billion

Asset Quality Remains Excellent with Total Nonperforming Loans to Total Loans of 0.02% at September 30, 2023

LCNB Wealth Management Assets Up 18.9% Year-over-Year to $1.10 Billion

Cincinnati Bancorp, Inc. Acquisition Expected to Close in November 2023

LEBANON, Ohio--(BUSINESS WIRE)-- LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three and nine months ended September 30, 2023.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, “LCNB achieved another solid quarter of growth, as total assets increased 4.0% from the same period a year ago to a record $1.98 billion, primarily due to a 5.8% increase in net loans. Significant competition for deposits and higher year-over-year levels of borrowings continue to increase our cost of funds and impact profitability and we expect these trends to continue over the near term. As we approach the end of 2023, we remain focused on managing non-interest expenses as well as maintaining excellent asset quality and strong liquidity levels. I am pleased with the progress our team continues to make in 2023 and their ability to execute our strategic objectives and deliver solid results. I want to thank our dedicated employees for all their hard work.”

Mr. Meilstrup continued, “Upon completion of the Cincinnati Bancorp acquisition, LCNB expects to have approximately $2.3 billion in total assets, $1.7 billion in loans and $1.8 billion in deposits. In addition, Cincinnati Bancorp expands our presence throughout the greater Cincinnati market and allows us to enter the Northern Kentucky market with one branch office. We believe the acquisition of Cincinnati Bancorp will enhance LCNB’s long-term profitability by providing our local, community-oriented financial services to more customers throughout Cincinnati and Northern Kentucky, leveraging Cincinnati Bancorp’s mortgage platform, and allowing us to offer Cincinnati Bancorp’s customers more financial products, including our Wealth Management solutions. We look forward to completing the acquisition in the coming weeks and welcoming Cincinnati Bancorp customers, employees, and shareholders to LCNB.”

Income Statement

Net income for the 2023 third quarter was $4,070,000, compared to $5,579,000 for the same period last year. Earnings per basic and diluted share for the 2023 third quarter were $0.37, compared to $0.49 for the same period last year. Net income for the nine-month period ended September 30, 2023 was $12,921,000, compared to $15,720,000 for the same period last year. Earnings per basic and diluted share for the nine-month period ended September 30, 2023 were $1.16, compared to $1.36 for the same period last year.

Adjusted net income for the 2023 third quarter was $4,309,000, or $0.40 per diluted share, compared to $5,579,000, or $0.49 per diluted share, 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 Bancorp, Inc. acquisition. Adjusted net income for the nine-month period ended September 30, 2023 was $13,507,000, or $1.22 per diluted share, compared to $15,720,000, or $1.36 per diluted share, in the prior year period.

Net interest income for the three months ended September 30, 2023 was $13,571,000, compared to $15,444,000 for the comparable period in 2022. Net interest income for the nine-month period ended September 30, 2023 was $41,690,000, as compared to $44,834,000 in the same period last year. Contributing to the variances for both the three and nine-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 variances. For the 2023 third quarter, LCNB’s tax equivalent net interest margin was 3.04%, compared to 3.54% for the same period last year. For the 2023 nine-month period, LCNB’s tax equivalent net interest margin was 3.20%, compared to 3.48% for the same period last year.

Non-interest income for the three months ended September 30, 2023 was $3,578,000, compared to $3,581,000 for the same period last year. For the nine months ended September 30, 2023, non-interest income increased $146,000, or by 1.4%, to $10,805,000, compared to $10,659,000 for the same period last year. The increase in non-interest income for the nine-month period was primarily due to higher fiduciary income and a decrease in net losses recognized on equity securities, partially offset by decreased service charges and fees on deposit accounts and lower gains on sales of loans.

Non-interest expense for the three months ended September 30, 2023 was $106,000 less than the comparable period in 2022 primarily due to the absence of losses recognized on the sale of a decommissioned office building during the 2022 quarter, partially offset by $302,000 in one-time merger-related expenses recognized during the third quarter. For the nine months ended September 30, 2023, non-interest expense was $778,000 higher than the comparable period in 2022, partially due to $742,000 in merger-related expenses, partially offset by gains recognized on the sale of a decommissioned office building during the second quarter 2023 and the absence of losses recognized on the sale of two decommissioned office buildings during the 2022 period. In addition, non-interest expense for the 2022 nine-month period was lower than it otherwise would have been because of an $889,000 gain recognized during the second quarter 2022 from the sale of other real estate owned.

Capital Allocation

During the nine months ended September 30, 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 September 30, 2023, LCNB had 315,047 shares remaining under its February 2023 share repurchase program.

For the third quarter ended September 30, 2023, LCNB paid $0.21 per share in dividends, a 5.0% increase from $0.20 per share for the third quarter last year. Year-to-date, LCNB has paid $0.63 per share in dividends, compared to $0.60 per share for the nine-month period last year.

Balance Sheet

Total assets at September 30, 2023 increased 4.0% to a record $1.98 billion from $1.90 billion at September 30, 2022. Net loans at September 30, 2023 increased 5.8% to a record $1.45 billion, compared to $1.37 billion at September 30, 2022.

Total deposits at September 30, 2023 decreased 2.4% to $1.62 billion, compared to $1.66 billion at September 30, 2022. While LCNB continues to experience greater competition for deposit accounts, total deposits at September 30, 2023 increased 1.3% from June 30, 2023.

Assets Under Management

Total assets managed at September 30, 2023 were a record $3.23 billion, compared to $3.03 billion at September 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, partially offset by decreases in cash management accounts.

Asset Quality

For the 2023 third quarter, LCNB recorded a total net recovery of credit losses of $114,000, compared to a total net recovery of credit losses of $157,000 for the 2022 third quarter. For the nine months ended September 30, 2023, LCNB recorded a total net recovery of credit losses of $141,000, compared to a total provision for credit losses of $269,000 for the nine months ended September 30, 2022.

Net charge-offs for the 2023 third quarter were $33,000, or 0.01% of average loans, compared to net charge-offs of $32,000, or 0.01% of average loans, for the same period last year. For the 2023 nine-month period, net charge-offs were $82,000, or 0.01% of average loans, compared to net charge-offs of $131,000, or 0.01% of average loans, for the 2022 nine-month period.

Total nonperforming loans, which include non-accrual loans and loans past due 90 days or more and still accruing interest, decreased $204,000 from $465,000 or 0.03% of total loans at September 30, 2022, to $261,000 or 0.02% of total loans at September 30, 2023. Nonperforming assets to total assets was 0.01% at September 30, 2023, compared to 0.02% at September 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.

Pursuant to the terms of the merger agreement, which has been approved by the Board of Directors of each company, CNNB shareholders had 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. The transaction is anticipated to close in November 2023. 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. 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. 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. 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;
11. 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
12. 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																				Nine Months Ended
	09-30-2023				06-30-2023				03-31-2023				12-31-2022				09-30-2022				09-30-2023				09-30-2022
Condensed Income Statement
Interest income	$	19,668				18,703				17,918				17,719				16,704				56,289				48,034
Interest expense		6,097				4,526				3,976				1,511				1,260				14,599				3,200
Net interest income		13,571				14,177				13,942				16,208				15,444				41,690				44,834
Provision for (recovery of) credit losses		(114	)			30				(57	)			(19	)			(157	)			(141	)			269
Net interest income after provision for (recovery of) credit losses		13,685				14,147				13,999				16,227				15,601				41,831				44,565
Non-interest income		3,578				3,646				3,581				3,629				3,581				10,805				10,659
Non-interest expense		12,244				12,078				12,525				12,065				12,350				36,847				36,069
Income before income taxes		5,019				5,715				5,055				7,791				6,832				15,789				19,155
Provision for income taxes		949				1,021				898				1,383				1,253				2,868				3,435
Net income	$	4,070			$	4,694			$	4,157			$	6,408				5,579				12,921				15,720
Supplemental Income Statement Information
Amort/Accret income on acquired loans	$	—				—				75				249				144				75				271
Tax-equivalent net interest income	$	13,617				14,223				13,989				16,257				15,495				41,829				44,985
Per Share Data
Dividends per share	$	0.21				0.21				0.21				0.21				0.20				0.63				0.60
Basic earnings per common share	$	0.37				0.42				0.37				0.57				0.49				1.16				1.36
Diluted earnings per common share	$	0.37				0.42				0.37				0.57				0.49				1.16				1.36
Book value per share	$	18.10				18.20				18.22				17.82				17.31				18.10				17.31
Tangible book value per share	$	12.72				12.81				12.86				12.48				11.97				12.72				11.97
Weighted average common shares outstanding:
Basic		11,038,720				11,056,308				11,189,170				11,211,328				11,284,225				11,094,185				11,478,256
Diluted		11,038,720				11,056,308				11,189,170				11,211,328				11,284,225				11,094,185				11,478,256
Shares outstanding at period end		11,123,382				11,116,080				11,202,063				11,259,080				11,293,639				11,123,382				11,293,639
Selected Financial Ratios
Return on average assets		0.82	%			0.98	%			0.88	%			1.34	%			1.15	%			0.89	%			1.09	%
Return on average equity		7.92	%			9.22	%			8.33	%			12.90	%			10.80	%			8.49	%			9.91	%
Return on average tangible common equity		11.21	%			13.07	%			11.85	%			18.59	%			15.30	%			12.04	%			13.86	%
Dividend payout ratio		56.76	%			50.00	%			56.76	%			36.84	%			40.82	%			54.31	%			44.12	%
Net interest margin (tax equivalent)		3.04	%			3.28	%			3.28	%			3.77	%			3.54	%			3.20	%			3.48	%
Efficiency ratio (tax equivalent)		71.21	%			67.59	%			71.29	%			60.67	%			64.74	%			70.01	%			64.82	%
Selected Balance Sheet Items
Cash and cash equivalents	$	43,422				26,020				31,876				22,701				29,460
Debt and equity securities		309,094				314,763				328,194				323,167				325,801
Loans:
Commercial and industrial	$	125,751				127,553				124,240				120,236				114,694
Commercial, secured by real estate		981,787				961,173				932,208				938,022				908,130
Residential real estate		313,286				312,338				303,051				305,575				316,669
Consumer		27,018				29,007				28,611				28,290				29,451
Agricultural		11,278				9,955				7,523				10,054				8,630
Other, including deposit overdrafts		80				69				62				81				52
Deferred net origination fees		(796	)			(844	)			(865	)			(980	)			(937	)
Loans, gross		1,458,404				1,439,251				1,394,830				1,401,278				1,376,689
Less allowance for credit losses on loans		7,932				7,956				7,858				5,646				5,644
Loans, net	$	1,450,472			$	1,431,295			$	1,386,972			$	1,395,632			$	1,371,045
	Three Months Ended																				Nine Months Ended
	09-30-2023				06-30-2023				03-31-2023				12-31-2022				09-30-2022				09-30-2023				09-30-2022
Selected Balance Sheet Items, continued
Allowance for Credit Losses on Loans:
Allowance for credit losses, beginning of period	$	7,956				7,858				5,646				5,644				5,833
Cumulative change in accounting principle - ASC 326		—				—				2,196				—				—
Provision for (recovery of) credit losses		9				131				32				(19	)			(157	)
Losses charged off		(57	)			(49	)			(36	)			(60	)			(53	)
Recoveries		24				16				20				81				21
Allowance for credit losses, end of period	$	7,932				7,956				7,858				5,646				5,644
Total earning assets	$	1,787,796				1,756,157				1,736,829				1,726,902			$	1,714,196
Total assets		1,981,668				1,950,763				1,924,808				1,919,398				1,904,975
Total deposits		1,616,890				1,596,709				1,603,881				1,604,970				1,657,370
Short-term borrowings		30,000				112,289				76,500				71,455				4,000
Long-term debt		112,641				18,122				18,598				19,072				24,539
Total shareholders’ equity		201,349				202,316				204,072				200,675				195,439
Equity to assets ratio		10.16	%			10.37	%			10.60	%			10.46	%			10.26	%
Loans to deposits ratio		90.20	%			90.14	%			86.97	%			87.31	%			83.06	%
Tangible common equity (TCE)	$	141,508				142,362				144,006				140,498				135,140
Tangible common assets (TCA)		1,921,827				1,890,809				1,864,742				1,859,221				1,844,676
TCE/TCA		7.36	%			7.53	%			7.72	%			7.56	%			7.33	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	36,177				30,742				35,712				24,330			$	35,763			$	34,234			$	32,393
Debt and equity securities		313,669				321,537				327,123				323,195				338,299				320,706				339,051
Loans	$	1,451,153				1,405,939				1,389,385				1,383,809			$	1,384,520			$	1,415,719			$	1,379,080
Less allowance for credit losses on loans		7,958				7,860				7,522				5,647				5,830				7,782				5,623
Net loans	$	1,443,195				1,398,079				1,381,863				1,378,162			$	1,378,690			$	1,407,937			$	1,373,457
Total earning assets	$	1,775,713				1,737,256				1,729,008				1,711,524				1,736,031				1,747,476				1,728,677
Total assets		1,971,269				1,927,956				1,922,031				1,903,626				1,929,155				1,940,591				1,919,804
Total deposits		1,610,508				1,604,346				1,583,857				1,637,201				1,669,932				1,599,668				1,657,401
Short-term borrowings		63,018				79,485				94,591				21,433				5,728				78,916				12,140
Long-term debt		72,550				18,514				18,983				23,855				24,920				36,878				15,907
Total shareholders’ equity		203,967				204,085				202,419				197,014				205,051				203,496				212,064
Equity to assets ratio		10.35	%			10.59	%			10.53	%			10.35	%			10.63	%			10.49	%			11.05	%
Loans to deposits ratio		90.11	%			87.63	%			87.72	%			84.52	%			82.91	%			88.50	%			83.21	%
Asset Quality
Net charge-offs (recoveries)	$	33				33				16				(21	)			32				82				131
Other real estate owned		—				—				—				—				—				—				—
Non-accrual loans	$	85				451				701				391				465				85				465
Loans past due 90 days or more and still accruing		176				256				—				39				—				176				—
Total nonperforming loans	$	261				707				701				430				465				261				465
Net charge-offs (recoveries) to average loans		0.01	%			0.01	%			0.00	%			(0.01	)%			0.01	%			0.01	%			0.01	%
Allowance for credit losses on loans to total loans		0.54	%			0.55	%			0.56	%			0.40	%			0.41	%
Nonperforming loans to total loans		0.02	%			0.05	%			0.05	%			0.03	%			0.03	%
Nonperforming assets to total assets		0.01	%			0.04	%			0.04	%			0.02	%			0.02	%
	Three Months Ended																				Nine Months Ended
	09-30-2023				06-30-2023				03-31-2023				12-31-2022				09-30-2022				09-30-2023				09-30-2022
Assets Under Management
LCNB Corp. total assets	$	1,981,668				1,950,763				1,924,808				1,919,398				1,904,975
Trust and investments (fair value)		731,342				744,149				716,578				678,366				611,409
Mortgage loans serviced		146,483				143,093				142,167				148,412				145,317
Cash management		2,445				2,668				1,831				1,925				53,199
Brokerage accounts (fair value)		368,854				384,889				374,066				347,737				314,144
Total assets managed		3,230,792				3,225,562				3,159,450				3,095,838				3,029,044
Reconciliation of Net Income Less Tax-Effected Merger-Related Costs
Net income	$	4,070				4,694				4,157				6,408				5,579				12,921				15,720
Merger-related costs		302				415				25				—				—				742				—
Tax effect		(63	)			(88	)			(5	)			—				—				(156	)			—
Adjusted net income	$	4,309				5,021				4,177				6,408				5,579				13,507				15,720
Adjusted basic and diluted earnings per share	$	0.40				0.45				0.37				0.57				0.49				1.22				1.36
Adjusted return on average assets		0.87	%			1.04	%			0.88	%			1.34	%			1.15	%			0.93	%			1.09	%
Adjusted return on average equity		8.38	%			9.87	%			8.37	%			12.90	%			10.79	%			8.87	%			9.91	%

		Three Months Ended September 30,																		Three Months Ended June 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)		$	1,451,153			17,875		4.89	%		$	1,384,520			15,026		4.31	%		$	1,405,939			16,763		4.78	%
Interest-bearing demand deposits			10,891			152		5.54	%			13,212			80		2.40	%			9,780			144		5.91	%
Federal Reserve Bank stock			4,652			—		—	%			4,652			—		—	%			4,652			140		12.07	%
Federal Home Loan Bank stock			7,007			134		7.59	%			4,369			65		5.90	%			6,713			121		7.23	%
Investment securities:																										0
Equity securities			3,382			38		4.46	%			4,387			20		1.81	%			3,386			38		4.50	%
Debt securities, taxable			274,494			1,296		1.87	%			297,001			1,323		1.77	%			282,325			1,323		1.88	%
Debt securities, non-taxable (2)			24,134			219		3.60	%			27,890			241		3.43	%			24,461			220		3.61	%
Total earnings assets			1,775,713			19,714		4.40	%			1,736,031			16,755		3.83	%			1,737,256			18,749		4.33	%
Non-earning assets			203,514									198,954									198,560
Allowance for credit losses			(7,958	)								(5,830	)								(7,860	)
Total assets		$	1,971,269								$	1,929,155								$	1,927,956
Interest-bearing demand and money market deposits		$	541,487			2,298		1.68	%		$	539,228			422		0.31	%		$	521,422			1,597		1.23	%
Savings deposits			379,515			129		0.13	%			453,420			159		0.14	%			395,367			134		0.14	%
IRA and time certificates			230,030			1,999		3.45	%			168,358			398		0.94	%			215,403			1,604		2.99	%
Short-term borrowings			63,018			830		5.23	%			5,728			71		4.92	%			79,485			1,008		5.09	%
Long-term debt			72,550			841		4.60	%			24,920			210		3.34	%			18,514			183		3.96	%
Total interest-bearing liabilities			1,286,600			6,097		1.88	%			1,191,654			1,260		0.42	%			1,230,191			4,526		1.48	%
Demand deposits			459,476									508,926									472,154
Other liabilities			21,226									23,524									21,526
Equity			203,967									205,051									204,085
Total liabilities and equity		$	1,971,269								$	1,929,155								$	1,927,956
Net interest rate spread (3)								2.52	%								3.41	%								2.85	%
Net interest income and net interest margin on a taxable-equivalent basis (4)						13,617		3.04	%						15,495		3.54	%						14,223		3.28	%
Ratio of interest-earning assets to interest-bearing liabilities			138.02	%								145.68	%								141.22	%

(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)
	September 30, 2023 (Unaudited)				December 31, 2022
ASSETS:
Cash and due from banks	$	23,124				20,244
Interest-bearing demand deposits		20,298				2,457
Total cash and cash equivalents		43,422				22,701
Investment securities:
Equity securities with a readily determinable fair value, at fair value		1,254				2,273
Equity securities without a readily determinable fair value, at cost		2,099				2,099
Debt securities, available-for-sale, at fair value		274,500				289,850
Debt securities, held-to-maturity, at cost, net		19,006				19,878
Federal Reserve Bank stock, at cost		4,652				4,652
Federal Home Loan Bank stock, at cost		7,583				4,415
Loans, net		1,450,472				1,395,632
Premises and equipment, net		33,288				33,042
Operating lease right-of-use assets		6,093				6,525
Goodwill		59,221				59,221
Core deposit and other intangibles, net		1,351				1,827
Bank-owned life insurance		45,128				44,298
Interest receivable		8,087				7,482
Other assets, net		25,512				25,503
TOTAL ASSETS	$	1,981,668				1,919,398
LIABILITIES:
Deposits:
Noninterest-bearing	$	453,146				505,824
Interest-bearing		1,163,744				1,099,146
Total deposits		1,616,890				1,604,970
Short-term borrowings		30,000				71,455
Long-term debt		112,641				19,072
Operating lease liabilities		6,317				6,647
Accrued interest and other liabilities		14,471				16,579
TOTAL LIABILITIES		1,780,319				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 14,334,765 and 14,270,550 shares at September 30, 2023 and December 31, 2022, respectively; outstanding 11,123,382 and 11,259,080 shares at September 30, 2023 and December 31, 2022, respectively		144,865				144,069
Retained earnings		143,211				139,249
Treasury shares at cost, 3,211,383 and 3,011,470 shares at September 30, 2023 and December 31, 2022, respectively		(56,015	)			(52,689	)
Accumulated other comprehensive loss, net of taxes		(30,712	)			(29,954	)
TOTAL SHAREHOLDERS' EQUITY		201,349				200,675
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,981,668			$	1,919,398

LCNB CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited)
	Three Months Ended September 30,							Nine Months Ended September 30,
	2023				2022			2023			2022
INTEREST INCOME:
Interest and fees on loans	$	17,875			15,026			50,781			43,360
Dividends on equity securities:
With a readily determinable fair value		9			14			34			40
Without a readily determinable fair value		29			6			79			16
Interest on debt securities:
Taxable		1,296			1,323			3,962			3,672
Non-taxable		173			190			523			567
Other investments		286			145			910			379
TOTAL INTEREST INCOME		19,668			16,704			56,289			48,034
INTEREST EXPENSE:
Interest on deposits		4,426			979			10,217			2,493
Interest on short-term borrowings		830			71			3,142			320
Interest on long-term debt		841			210			1,240			387
TOTAL INTEREST EXPENSE		6,097			1,260			14,599			3,200
NET INTEREST INCOME		13,571			15,444			41,690			44,834
PROVISION FOR (RECOVERY OF) CREDIT LOSSES		(114	)		(157	)		(141	)		269
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) CREDIT LOSSES		13,685			15,601			41,831			44,565
NON-INTEREST INCOME:
Fiduciary income		1,736			1,513			5,263			4,851
Service charges and fees on deposit accounts		1,397			1,706			4,324			4,658
Bank-owned life insurance income		282			269			830			803
Gains from sales of loans		29			—			38			188
Other operating income		134			93			350			159
TOTAL NON-INTEREST INCOME		3,578			3,581			10,805			10,659
NON-INTEREST EXPENSE:
Salaries and employee benefits		7,044			7,062			21,454			21,291
Equipment expenses		397			398			1,175			1,234
Occupancy expense, net		805			790			2,367			2,300
State financial institutions tax		396			439			1,189			1,312
Marketing		223			215			735			845
Amortization of intangibles		113			113			336			365
FDIC insurance premiums, net		224			137			663			397
Contracted services		671			613			1,978			1,902
Other real estate owned, net		1			5			3			(874	)
Merger-related expenses		302			—			742			—
Other non-interest expense		2,068			2,578			6,205			7,297
TOTAL NON-INTEREST EXPENSE		12,244			12,350			36,847			36,069
INCOME BEFORE INCOME TAXES		5,019			6,832			15,789			19,155
PROVISION FOR INCOME TAXES		949			1,253			2,868			3,435
NET INCOME	$	4,070			5,579			12,921			15,720
Earnings per common share:
Basic		0.37			0.49			1.16			1.36
Diluted		0.37			0.49			1.16			1.36
Weighted average common shares outstanding:
Basic		11,038,720			11,284,225			11,094,185			11,478,256
Diluted		11,038,720			11,284,225			11,094,185			11,478,256

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231023855727/en/

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

Source: LCNB Corp.

FAQ

What were LCNB's financial results for Q3 2023?

LCNB reported stable deposit base and a 90.20% loan-to-deposit ratio for Q3 2023. Net loans increased 5.8% YoY to a record $1.45 billion.

What is the asset quality of LCNB?

LCNB has excellent asset quality, with total nonperforming loans at 0.02% of total loans.

What is the status of the acquisition of Cincinnati Bancorp, Inc.?

The acquisition is expected to close in November 2023, subject to customary closing conditions and regulatory approvals.