LCNB Corp. Reports Financial Results for the Three and Six Months Ended June 30, 2024

Rhea-AI Summary

LCNB Corp. (NASDAQ: LCNB) reported financial results for Q2 2024, showcasing the impact of recent acquisitions. Key highlights include:

- Record total assets of $2.37 billion, up 21.6% year-over-year
- Net income of $0.9 million, or $0.07 per diluted share
- Adjusted net income of $4.1 million, or $0.29 per diluted share
- Net interest margin increased to 2.86%, up 14 basis points from Q1 2024
- Non-interest income grew 11.9% year-over-year to $4.1 million
- Total deposits increased 21.7% to $1.94 billion
- Record total assets managed of $4.21 billion

The company expects year-over-year earnings growth to reaccelerate in Q4 2024, driven by integration efforts, asset quality, and balance sheet strengthening initiatives.

Positive

• Record total assets of $2.37 billion, up 21.6% year-over-year
• Net interest margin increased to 2.86%, up 14 basis points from Q1 2024
• Non-interest income grew 11.9% year-over-year to $4.1 million
• Total deposits increased 21.7% to $1.94 billion
• Record total assets managed of $4.21 billion
• Adjusted net income increased by 56.8% to $4.1 million quarter-over-quarter

Negative

• Net income decreased to $0.9 million from $4.7 million in Q2 2023
• Earnings per diluted share decreased to $0.07 from $0.42 in Q2 2023
• Non-interest expense increased by $5.7 million year-over-year
• Nonperforming loans increased to $3.0 million, or 0.17% of total loans, from $707,000, or 0.05% of total loans in Q2 2023

Insights

Financial Analyst

LCNB Corp.'s recent financial results exhibit a period of significant transformation and growth driven by strategic acquisitions. The integration of Eagle Financial Bancorp, Inc. and Cincinnati Bancorp, Inc. has notably increased total managed assets to $4.21 billion, a milestone for the company. Additionally, the rise in non-interest income by 11.9% year-over-year reflects robust growth in their financial services portfolio. However, the decline in net income to $0.9 million from $4.7 million year-over-year and the reduction in net interest margin to 2.86% from 3.28% present critical areas of concern. These figures suggest that while LCNB is expanding its asset base, it is also experiencing pressure on profitability margins. Investors should monitor the company's ability to manage integration costs and improve operational efficiencies to achieve sustainable earnings growth.

Market Research Analyst

The acquisitions of Eagle Financial Bancorp and Cincinnati Bancorp have substantially bolstered LCNB Corp.’s market presence in Ohio and Kentucky, signaling a strategic move towards becoming a dominant regional player. The 20.9% increase in net loans and 21.7% rise in total deposits year-over-year underline a successful expansion strategy. However, the increased non-interest expenses, largely due to merger-related costs and higher personnel expenses, raise concerns about the short-term financial strain on the company. LCNB's future performance will largely depend on how well it can leverage these acquisitions to drive revenue growth and offset the associated costs. The company’s proactive approach in expanding wealth management and mortgage loan capabilities seems promising for long-term growth.

Investment Strategist

From an investment perspective, LCNB Corp.’s financial results highlight both opportunities and challenges. The substantial increase in assets under management and organic loan growth are positive indicators of the company’s expanding influence. The $4.21 billion in total managed assets marks a record for LCNB, enhancing its competitive edge. However, the significant drop in net income and earnings per share compared to last year suggests that the company is grappling with the financial impacts of its recent acquisitions. Investors should weigh the immediate financial pressures against the long-term growth potential these acquisitions bring. The projected earnings growth reacceleration in the fourth quarter of 2024 could serve as a pivotal moment for LCNB, provided it successfully integrates the new assets and capitalizes on its expanded market reach.

Second quarter results include the initial contribution of the April 12, 2024 Eagle Financial Bancorp, Inc. acquisition and the growing benefits of the November 1, 2023 Cincinnati Bancorp, Inc. acquisition

LCNB ended the quarter with record total assets, record LCNB Wealth Management assets, and record total assets managed of $4.21 billion

Non-interest income for the 2024 second quarter increased 11.9% year-over-year to $4.1 million, and up 3.8% from the first quarter

Net interest margin for the 2024 second quarter increased 14 basis points from the 2024 first quarter

Management continues to expect year-over-year earnings growth to reaccelerate in the fourth quarter of 2024

LEBANON, Ohio--(BUSINESS WIRE)-- LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three months and six months ended June 30, 2024.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, “Our second quarter results demonstrate the initial contribution of the April 12, 2024 Eagle Financial Bancorp, Inc. (“EFBI” or “Eagle”) acquisition and the growing benefits of the November 1, 2023 Cincinnati Bancorp, Inc. (“Cincinnati Federal”) acquisition. As a result of these transformative transactions, LCNB's scale increased to $4.21 billion in total assets managed, becoming one of the largest independent community banks in Ohio. I am extremely proud of how our teams have come together to successfully integrate the Eagle and Cincinnati Federal acquisitions. During the 2024 second quarter, we completed the data and customer conversion of the Eagle transaction, and we are now on one system under the LCNB brand.”

Mr. Meilstrup continued, “We believe our financial results are beginning to reflect the benefits of our larger scale and the opportunities to provide additional financial services to customers across our Ohio and Kentucky markets, including expanded wealth management solutions, greater mortgage loan capabilities, and additional cash management offerings. As a result, we experienced year-over-year and sequential growth in non-interest income, and we saw a 14-basis point sequential increase in our tax equivalent net interest margin. In addition, I am encouraged by the significant improvement in adjusted net income, a non-GAAP financial measure that excludes certain nonrecurring items, over the past three months, as our 2024 second quarter adjusted net income increased by 56.8% to $4.1 million, or $0.29 per diluted share.”

“We believe we are well positioned for continued improvements in profitability as a result of the completion of our integration efforts, our excellent asset quality, and the initiatives we are pursuing to strengthen our balance sheet. I look forward to updating shareholders on the progress we are making, as we focus on providing leading financial services and expanding our product offerings to more customers throughout our Ohio and Kentucky communities,” concluded Mr. Meilstrup.

Income Statement

Net income for the 2024 second quarter was $0.9 million, compared to net income of $4.7 million for the same period last year. Earnings per basic and diluted share for the 2024 second quarter were $0.07, compared to $0.42 for the same period last year. Net income for the six-month period ended June 30, 2024 was $2.8 million, compared to $8.9 million for the same period last year. Earnings per basic and diluted share for the six-month period ended June 30, 2024 were $0.21, compared to $0.79 for the same period last year.

Adjusted net income for the 2024 second quarter was $4.1 million, or $0.29 per basic and diluted share, compared to $5.0 million, or $0.45 per basic and diluted share, for the same period last year. Adjusted net income for the first half ended June 30, 2024 was $6.7 million, or $0.49 per basic and diluted share, compared to $9.2 million, or $0.82 per basic and diluted share, in the prior year period.

Net interest income for the three months ended June 30, 2024 was $15.2 million, compared to $14.2 million for the comparable period in 2023. Net interest income for the six-month period ended June 30, 2024 was $29.1 million, as compared to $28.1 million in the same period last year. An increase in interest income from loans, due to a higher volume of average loans outstanding and the average rates earned on these loans, was partially offset by higher average balances in interest-bearing demand and money market deposits, IRA and time certificates, and long-term debt and an increase in rates paid for these liabilities. For the 2024 second quarter, LCNB’s tax equivalent net interest margin was 2.86%, compared to 3.28% for the same period last year. Net interest margin for the six-month period ended June 30, 2024 was 2.80%, as compared to 3.28% in the same period last year.

Non-interest income for the three months ended June 30, 2024 was $4.1 million, compared to $3.6 million for the same period last year. For the six months ended June 30, 2024, non-interest income increased $782,000, or by 10.8%, to $8.0 million, compared to $7.2 million for the same period last year. The increase in non-interest income for both the three- and six-month periods was primarily due to higher fiduciary income and higher gains on sales of loans. Partially offsetting non-interest income during the quarter was a $843,000 pretax loss on the sale of approximately $48.9 million of below market rate loans acquired from Cincinnati Federal. The Company estimates an earn-back period of three to four months on the sale associated with reduced interest expense.

Non-interest expense for the three months ended June 30, 2024 was $17.8 million, compared to $12.1 million for the same period last year. The $5.7 million increase was primarily due to higher personnel and operating expenses, as well as one-time merger related expenses, associated with the Cincinnati Federal and Eagle acquisitions. For the six months ended June 30, 2024, non-interest expense was $8.7 million higher than the comparable period in 2023, partially due to an increase of $3.2 million in salaries and employee benefit costs, a $459,000 increase in FDIC insurance premiums, and a $2.7 million increase in merger-related expenses. In addition, non-interest expense for the 2023 second quarter benefited from a $425,000 gain recognized on the sale of an office building that had been closed as a result of LCNB's office consolidation strategy. The remaining net increase can be attributed to smaller increases in various other accounts.

Capital Allocation

During the six months ended June 30, 2024, LCNB did not repurchase any of its outstanding shares. At June 30, 2024, LCNB had 315,047 shares remaining under its share repurchase program.

For the second quarter ended June 30, 2024, LCNB paid $0.22 per share in dividends, a 4.8% increase from $0.21 per share in the second quarter of last year. Year-to-date, LCNB paid $0.44 per share in dividends, compared to $0.42 per share for the first half of last year.

Balance Sheet

Total assets at June 30, 2024 increased 21.6%, to $2.37 billion, from $1.95 billion at June 30, 2023. Net loans at June 30, 2024 increased 20.9%, to $1.73 billion, compared to $1.43 billion at June 30, 2023. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Cincinnati Federal and Eagle acquisitions. Not including the Cincinnati Federal and Eagle acquisitions, total net loans increased 2.1% organically, or by $30.4 million, from the same period a year ago.

Loans held for sale totaled $44.0 million, compared to $75.6 million at March 31, 2024, and are primarily composed of loans scheduled to be sold to an investor during the remainder of 2024. LCNB anticipates that proceeds from the sale will be used for general corporate purposes, which may include supporting loan growth, paying down long-term debt, and adding to liquidity balances.

Total deposits at June 30, 2024 increased 21.7% to $1.94 billion, compared to $1.60 billion at June 30, 2023. Not including the Cincinnati Federal and Eagle acquisitions, total deposits increased 6.8% organically, or by $108.7 million, from June 30, 2023.

As of the transaction date, the fair value of loans acquired from Eagle totaled $127.0 million and the fair value of deposits acquired totaled $132.4 million. Core deposit intangibles totaled $3.8 million and the increase to goodwill was $14.0 million.

Assets Under Management

Total assets managed at June 30, 2024 were a record $4.21 billion, compared to $3.23 billion at June 30, 2023. The year-over-year increase in total assets managed was primarily due to the Cincinnati Federal and Eagle acquisitions and organic growth in LCNB total assets, trust and investments, mortgage loans serviced, and brokerage accounts. Organically, trust and investments and brokerage accounts increased due to a higher number of new LCNB Wealth Management customer accounts 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 2024 second quarter, LCNB recorded a provision for credit losses of $528,000, compared to a provision for credit losses of $30,000 for the 2023 second quarter. For the six months ended June 30, 2024, LCNB recorded a total provision for credit losses of $653,000, compared to a total recovery of credit losses of $27,000 for the six months ended June 30, 2023.

Net charge-offs for the 2024 second quarter were $18,000, or 0.00% of average loans, compared to net charge-offs of $33,000, or 0.01% of average loans, annualized, for the same period last year. For the 2024 six-month period, net charge-offs were $63,000, or 0.01% of average loans, compared to net charge-offs of $49,000, or 0.01% of average loans, for the 2023 six-month period.

Total nonperforming loans, which include non-accrual loans and loans past due 90 days or more and still accruing interest, were $3.0 million, or 0.17% of total loans, at June 30, 2024, compared to $707,000, or 0.05% of total loans, at June 30, 2023. The year-over-year increase in nonaccrual loans was primarily due to one commercial real estate relationship, representing a balance of $2.6 million. LCNB does not foresee a loss on this loan as it is deemed to have adequate provision based on management’s current review of the property value. The nonperforming assets to total assets ratio was 0.13% at June 30, 2024, compared to 0.04% at June 30, 2023.

About LCNB Corp.

LCNB Corp. is a financial holding company headquartered in Lebanon, Ohio. Through its subsidiary, LCNB National Bank (the “Bank”), it serves customers and communities in Southwest and South-Central Ohio 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, 2023, 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 recent and 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 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, 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.

Exhibit 99.2
LCNB Corp. and Subsidiaries Financial Highlights (Dollars in thousands, except per share amounts) (Unaudited)
	Three Months Ended																				Six Months Ended
	06-30-2024				03-31-2024				12-31-2023				09-30-2023				06-30-2023				06-30-2024			06-30-2023
Condensed Income Statement
Interest income	$	26,965			$	24,758			$	23,310				19,668				18,703			51,723			36,621
Interest expense		11,748				10,863				8,651				6,097				4,526			22,611			8,502
Net interest income		15,217				13,895				14,659				13,571				14,177			29,112			28,119
Provision for (recovery of) credit losses		528				125				2,218				(114	)			30			653			(27	)
Net interest income after provision for (recovery of) credit losses		14,689				13,770				12,441				13,685				14,147			28,459			28,146
Non-interest income		4,080				3,929				4,606				3,578				3,646			8,009			7,227
Non-interest expense		17,825				15,472				17,576				12,244				12,078			33,297			24,603
Income (loss) before income taxes		944				2,227				(529	)			5,019				5,715			3,171			10,770
Provision for (benefit from) income taxes		19				312				(236	)			949				1,021			331			1,919
Net income (loss)	$	925			$	1,915			$	(293	)		$	4,070				4,694			2,840			8,851
Supplemental Income Statement Information
Amort/Accrete income on acquired loans	$	1,248			$	776			$	410				—				—			2,024			74
Amort/Accrete expenses on acquired interest-bearing liabilities	$	638			$	459			$	309				—				—			1,096			—
Tax-equivalent net interest income	$	15,256			$	13,933			$	14,703				13,617				14,223			29,189			28,212
Per Share Data
Dividends per share	$	0.22			$	0.22			$	0.22				0.21				0.21			0.44			0.42
Basic earnings (loss) per common share	$	0.07			$	0.15			$	(0.02	)			0.37				0.42			0.21			0.79
Diluted earnings (loss) per common share	$	0.07			$	0.15			$	(0.02	)			0.37				0.42			0.21			0.79
Book value per share	$	17.33			$	17.67			$	17.86				18.10				18.20			17.33			18.20
Tangible book value per share	$	10.08			$	11.26			$	11.42				12.72				12.81			10.08			12.81
Weighted average common shares outstanding:
Basic		14,033,264				13,112,302				12,378,289				11,038,720				11,056,308			13,610,854			11,122,371
Diluted		14,033,264				13,112,302				12,378,289				11,038,720				11,056,308			13,610,854			11,122,371
Shares outstanding at period end		14,151,755				13,224,276				13,173,569				11,123,382				11,116,080			14,151,755			11,116,080
Selected Financial Ratios
Return on average assets		0.15	%			0.34	%			(0.05	)%			0.82	%			0.98	%		0.24	%		0.93	%
Return on average equity		1.53	%			3.28	%			(0.53	)%			7.92	%			9.22	%		2.38	%		8.78	%
Return on average tangible common equity		2.02	%			4.39	%			(0.72	)%			11.21	%			13.07	%		3.17	%		12.46	%
Dividend payout ratio		314.29	%			146.67	%			NM				56.76	%			50.00	%		209.52	%		53.16	%
Net interest margin (tax equivalent)		2.86	%			2.72	%			2.99	%			3.04	%			3.28	%		2.80	%		3.28	%
Efficiency ratio (tax equivalent)		92.19	%			86.62	%			91.02	%			71.21	%			67.59	%		89.51	%		69.42	%
Selected Balance Sheet Items
Cash and cash equivalents	$	34,872			$	32,951			$	39,723				43,422				26,020
Debt and equity securities		312,241				306,775				318,723				309,094				314,763
Loans:
Commercial and industrial	$	125,703			$	122,229			$	120,411				125,751				127,553
Commercial, secured by real estate		1,117,798				1,099,601				1,107,556				981,787				961,173
Residential real estate		458,949				398,250				459,073				313,286				312,338
Consumer		22,912				24,137				25,578				27,018				29,007
Agricultural		11,685				12,647				10,952				11,278				9,955
Other, including deposit overdrafts		233				73				82				80				69
Deferred net origination fees		(533	)			(583	)			(181	)			(796	)			(844	)
Loans, gross		1,736,747				1,656,354				1,723,471				1,458,404				1,439,251
Less allowance for credit losses		11,270				10,557				10,525				7,932				7,956
Loans, net	$	1,725,477				1,645,797				1,712,946				1,450,472				1,431,295
Loans held for sale		44,002				75,581				—				—				—
NM - Not Meaningful
	Three Months Ended																				Six Months Ended
	06-30-2024				03-31-2024				12-31-2023				09-30-2023				06-30-2023				06-30-2024			06-30-2023
Selected Balance Sheet Items, continued
Allowance for Credit Losses on Loans:
Allowance for credit losses, beginning of period	$	10,557				10,525				7,932				7,956				7,858
Fair value adjustment for purchased credit deteriorated loans		189				—				493				—				—
Provision for credit losses		542				77				2,203				9				131
Losses charged off		(87	)			(78	)			(126	)			(57	)			(49	)
Recoveries		69				33				23				24				16
Allowance for credit losses, end of period	$	11,270				10,557				10,525				7,932				7,956
Total earning assets	$	2,058,110			$	1,971,130			$	2,045,382				1,787,796			$	1,756,157
Total assets		2,371,313				2,283,151				2,291,592				1,981,668				1,950,763
Total deposits		1,943,060				1,858,493				1,824,389				1,616,890				1,596,709
Short-term borrowings		—				10,000				97,395				30,000				112,289
Long-term debt		162,150				162,638				113,123				112,641				18,122
Total shareholders’ equity		245,214				233,663				235,303				201,349				202,316
Equity to assets ratio		10.34	%			10.23	%			10.27	%			10.16	%			10.37	%
Loans to deposits ratio		89.38	%			89.12	%			94.47	%			90.20	%			90.14	%
Tangible common equity (TCE)	$	142,679			$	145,850			$	146,999				141,508				142,362
Tangible common assets (TCA)		2,268,778				2,195,338				2,203,288				1,921,827				1,890,809
TCE/TCA		6.29	%			6.64	%			6.67	%			7.36	%			7.53	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	39,396			$	51,366			$	49,436				36,177				30,742			45,378			33,205
Debt and equity securities		309,668				310,771				310,274				313,669				321,537			310,222			324,320
Loans, including loans held for sale	$	1,818,253			$	1,722,568			$	1,622,911				1,451,153				1,405,939			1,770,410			1,397,708
Less allowance for credit losses on loans		11,386				10,523				8,826				7,958				7,860			10,954			7,692
Net loans	$	1,806,867				1,712,045				1,614,085				1,443,195				1,398,079			1,759,456			1,390,016
Total earning assets, including loans held for sale	$	2,142,064			$	2,056,656			$	1,952,121				1,775,713				1,737,256			2,099,362			1,733,160
Total assets		2,404,782				2,294,766				2,182,477				1,971,269				1,927,956			2,349,774			1,925,004
Total deposits		1,965,987				1,824,546				1,759,677				1,610,508				1,604,346			1,895,268			1,594,159
Short-term borrowings		11,291				65,052				64,899				63,018				79,485			38,171			86,996
Long-term debt		162,555				150,177				115,907				72,550				18,514			156,366			18,747
Total shareholders’ equity		243,927				235,119				220,678				203,967				204,085			239,523			203,257
Equity to assets ratio		10.14	%			10.25	%			10.11	%			10.35	%			10.59	%		10.19	%		10.56	%
Loans to deposits ratio		92.49	%			94.41	%			92.23	%			90.11	%			87.63	%		93.41	%		87.68	%
Asset Quality
Net charge-offs	$	18			$	45			$	102				33				33			63			49
Other real estate owned		—				—				—				—				—			—			—
Non-accrual loans	$	2,845			$	2,719			$	80				85				451			2,845			451
Loans past due 90 days or more and still accruing		159				524				72				176				256			159			256
Total nonperforming loans	$	3,004				3,243				152				261				707			3,004			707
Net charge-offs to average loans		0.00	%			0.01	%			0.02	%			0.01	%			0.01	%		0.01	%		0.01	%
Allowance for credit losses on loans to total loans		0.65	%			0.64	%			0.61	%			0.54	%			0.55	%
Nonperforming loans to total loans		0.17	%			0.20	%			0.01	%			0.02	%			0.05	%
Nonperforming assets to total assets		0.13	%			0.14	%			0.01	%			0.01	%			0.04	%
	Three Months Ended																				Six Months Ended
	06-30-2024				03-31-2024				12-31-2023				09-30-2023				06-30-2023				06-30-2024			06-30-2023
Assets Under Management
LCNB Corp. total assets	$	2,371,313				2,283,151				2,291,592				1,981,668				1,950,763
Trust and investments (fair value)		897,746				890,800				806,770				731,342				744,149
Mortgage loans serviced		422,951				386,490				391,800				146,483				143,093
Cash management		93,842				13,314				2,375				2,445				2,668
Brokerage accounts (fair value)		419,646				411,211				392,390				368,854				384,889
Total assets managed	$	4,205,498				3,984,966				3,884,927				3,230,792				3,225,562
Reconciliation of Net Income Less Tax-Effected Merger-Related Costs
Net income (loss)	$	925				1,915				(293	)			4,070				4,694			2,840			8,851
Merger expenses		2,320				775				3,914				302				415			3,095			440
Provision for credit losses on non-PCD loans		763				—				1,722				—				—			763			—
Loss on sale of below-market acquired loans		843				—				—				—				—			843			—
Tax effect		(773	)			(90	)			(1,102	)			(3	)			(63	)		(863	)		(67	)
Adjusted net income	$	4,078				2,600				4,241				4,369				5,046			6,678			9,224
Adjusted basic and diluted earnings per share	$	0.29			$	0.20			$	0.34				0.40				0.45			0.49			0.82
Adjusted return on average assets		0.68	%			0.46	%			0.77	%			0.88	%			1.05	%		0.57	%		0.97	%
Adjusted return on average equity		6.72	%			4.45	%			7.62	%			8.50	%			9.92	%		5.61	%		9.15	%

		Three Months Ended June 30,																		Three Months Ended March 31,
		2024									2023									2024
		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)		$	1,818,253			24,836		5.49	%		$	1,405,939			16,763		4.78	%		$	1,722,568			22,682			5.30	%
Interest-bearing demand deposits			14,143			215		6.11	%			9,780			144		5.91	%			23,317			324			5.59	%
Federal Reserve Bank stock			6,248			180		11.59	%			4,652			140		12.07	%			5,509			(4	)		(0.29	)%
Federal Home Loan Bank stock			20,152			367		7.32	%			6,713			121		7.23	%			16,239			341			8.45	%
Investment securities:
Equity securities			4,985			39		3.15	%			3,386			38		4.50	%			4,995			40			3.22	%
Debt securities, taxable			259,768			1,183		1.83	%			282,325			1,323		1.88	%			265,164			1,232			1.87	%
Debt securities, non-taxable (2)			18,515			184		4.00	%			24,461			220		3.61	%			18,864			181			3.86	%
Total earnings assets			2,142,064			27,004		5.07	%			1,737,256			18,749		4.33	%			2,056,656			24,796			4.85	%
Non-earning assets			274,104									198,560									248,633
Allowance for credit losses			(11,386	)								(7,860	)								(10,523	)
Total assets		$	2,404,782								$	1,927,956								$	2,294,766
Interest-bearing demand and money market deposits		$	648,772			3,575		2.22	%		$	521,422			1,597		1.23	%		$	643,199			3,917			2.45	%
Savings deposits			372,240			307		0.33	%			395,367			134		0.14	%			368,049			206			0.23	%
IRA and time certificates			493,297			5,808		4.74	%			215,403			1,604		2.99	%			370,130			4,067			4.42	%
Short-term borrowings			11,291			181		6.45	%			79,485			1,008		5.09	%			65,052			935			5.78	%
Long-term debt			162,555			1,877		4.64	%			18,514			183		3.96	%			150,177			1,738			4.65	%
Total interest-bearing liabilities			1,688,155			11,748		2.80	%			1,230,191			4,526		1.48	%			1,596,607			10,863			2.74	%
Demand deposits			451,678									472,154									443,168
Other liabilities			21,022									21,526									19,872
Equity			243,927									204,085									235,119
Total liabilities and equity		$	2,404,782								$	1,927,956								$	2,294,766
Net interest rate spread (3)								2.27	%								2.85	%									2.11	%
Net interest income and net interest margin on a taxable-equivalent basis (4)						15,256		2.86	%						14,223		3.28	%						13,933			2.72	%
Ratio of interest-earning assets to interest-bearing liabilities			126.89	%								141.22	%								128.81	%

(1)		Includes non-accrual loans and loans held for sale
(2)		Income from tax-exempt securities is included in interest income on a taxable-equivalent basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 21%.
(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.

Exhibit 99.2
LCNB CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited, dollars in thousands)
	June 30, 2024				December 31, 2023
ASSETS:
Cash and due from banks	$	25,750				36,535
Interest-bearing demand deposits		9,122				3,188
Total cash and cash equivalents		34,872				39,723
Investment securities:
Equity securities with a readily determinable fair value, at fair value		1,330				1,336
Equity securities without a readily determinable fair value, at cost		3,666				3,666
Debt securities, available-for-sale, at fair value		261,357				276,601
Debt securities, held-to-maturity, at cost, net of allowance for credit losses of $7 and $5 at June 30, 2024 and December 31, 2023, respectively		18,844				16,858
Federal Reserve Bank stock, at cost		6,334				5,086
Federal Home Loan Bank stock, at cost		20,710				15,176
Loans, net of allowance for credit losses of $11,270 and 10,525 at June 30, 2024 and December 31, 2023, respectively		1,725,477				1,712,946
Loans held for sale		44,002				—
Premises and equipment, net		40,766				36,302
Operating lease right-of-use assets		6,026				6,000
Goodwill		93,922				79,509
Core deposit and other intangibles, net		12,135				9,494
Bank-owned life insurance		53,510				49,847
Interest receivable		9,473				8,405
Other assets, net		38,889				30,643
TOTAL ASSETS	$	2,371,313				2,291,592
LIABILITIES:
Deposits:
Noninterest-bearing	$	449,110				462,267
Interest-bearing		1,493,950				1,362,122
Total deposits		1,943,060				1,824,389
Short-term borrowings		—				97,395
Long-term debt		162,150				113,123
Operating lease liabilities		6,290				6,261
Accrued interest and other liabilities		14,599				15,121
TOTAL LIABILITIES		2,126,099				2,056,289
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 17,363,138 and 16,384,952 shares at June 30, 2024 and December 31, 2023, respectively; outstanding 14,151,755 and 13,173,569 shares at June 30, 2024 and December 31, 2023, respectively		187,195				173,637
Retained earnings		136,883				140,017
Treasury shares at cost, 3,211,383 shares at June 30, 2024 and December 31, 2023		(56,015	)			(56,015	)
Accumulated other comprehensive loss, net of taxes		(22,849	)			(22,336	)
TOTAL SHAREHOLDERS' EQUITY		245,214				235,303
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,371,313			$	2,291,592

Exhibit 99.2
LCNB CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited)
	Three Months Ended June 30,					Six Months Ended June 30,
	2024			2023		2024			2023
INTEREST INCOME:
Interest and fees on loans	$	24,836		16,763		47,518			32,906
Dividends on equity securities:
With a readily determinable fair value		9		8		18			25
Without a readily determinable fair value		30		30		61			50
Interest on debt securities:
Taxable		1,183		1,323		2,415			2,666
Non-taxable		145		174		288			350
Other investments		762		405		1,423			624
TOTAL INTEREST INCOME		26,965		18,703		51,723			36,621
INTEREST EXPENSE:
Interest on deposits		9,690		3,335		17,880			5,791
Interest on short-term borrowings		181		1,008		1,116			2,312
Interest on long-term debt		1,877		183		3,615			399
TOTAL INTEREST EXPENSE		11,748		4,526		22,611			8,502
NET INTEREST INCOME		15,217		14,177		29,112			28,119
PROVISION FOR (RECOVERY OF) CREDIT LOSSES		528		30		653			(27	)
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) CREDIT LOSSES		14,689		14,147		28,459			28,146
NON-INTEREST INCOME:
Fiduciary income		2,067		1,787		4,040			3,527
Service charges and fees on deposit accounts		1,537		1,445		2,921			2,927
Net losses from sales of debt securities, available-for-sale		—		—		(214	)		—
Bank-owned life insurance income		341		277		659			548
Net gains from sales of loans		50		3		572			9
Other operating income		85		134		31			216
TOTAL NON-INTEREST INCOME		4,080		3,646		8,009			7,227
NON-INTEREST EXPENSE:
Salaries and employee benefits		9,006		7,061		17,560			14,410
Equipment expenses		395		417		785			778
Occupancy expense, net		944		599		1,949			1,562
State financial institutions tax		476		396		904			793
Marketing		210		320		384			512
Amortization of intangibles		298		112		534			223
FDIC insurance premiums, net		394		224		898			439
Contracted services		844		666		1,628			1,307
Merger-related expenses		2,320		415		3,095			440
Other non-interest expense		2,938		1,868		5,560			4,139
TOTAL NON-INTEREST EXPENSE		17,825		12,078		33,297			24,603
INCOME BEFORE INCOME TAXES		944		5,715		3,171			10,770
PROVISION FOR INCOME TAXES		19		1,021		331			1,919
NET INCOME	$	925		4,694		2,840			8,851
Earnings per common share:
Basic	$	0.07		0.42		0.21			0.79
Diluted	$	0.07		0.42		0.21			0.79
Weighted average common shares outstanding:
Basic		14,033,264		11,056,308		13,610,854			11,122,371
Diluted		14,033,264		11,056,308		13,610,854			11,122,371

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723682222/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 was LCNB's net income for Q2 2024?

LCNB's net income for Q2 2024 was $0.9 million, or $0.07 per diluted share.

How did LCNB's total assets change in Q2 2024 compared to the previous year?

LCNB's total assets increased by 21.6% to $2.37 billion in Q2 2024, compared to $1.95 billion in Q2 2023.

What was LCNB's net interest margin in Q2 2024?

LCNB's tax equivalent net interest margin for Q2 2024 was 2.86%, an increase of 14 basis points from Q1 2024.

How much did LCNB's non-interest income grow in Q2 2024?

LCNB's non-interest income for Q2 2024 grew by 11.9% year-over-year to $4.1 million.

What was LCNB's total deposits at the end of Q2 2024?

LCNB's total deposits at June 30, 2024, increased 21.7% to $1.94 billion, compared to $1.60 billion at June 30, 2023.