LCNB Corp. Reports Record Financial Results for the Three and Six Months Ended June 30, 2023

Rhea-AI Summary

LCNB Corp. announces favorable second quarter performance and progress despite a difficult operating environment. Net loans increased 4.7% YoY to a record $1.43 billion. LCNB Wealth Management assets up 21.4% YoY to a record $1.13 billion. Acquisition of Cincinnati Bancorp expected to close in Q4 2023.

Positive

• Net loans increased 4.7% YoY to a record $1.43 billion
• LCNB Wealth Management assets up 21.4% YoY to a record $1.13 billion
• Acquisition of Cincinnati Bancorp expected to close in Q4 2023

Negative

• Net income for Q2 2023 decreased compared to the same period last year

Ended the Second Quarter with a Stable Deposit Base and a 90.14% Loan to Deposit Ratio

Net Loans Increased 4.7% Year-over-Year to a Record of $1.43 Billion

Asset Quality Remains Excellent with Total Nonperforming Loans to Total Loans of 0.05% at June 30, 2023

LCNB Wealth Management Assets Up 21.4% Year-over-Year to a Record $1.13 Billion

Cincinnati Bancorp, Inc. Acquisition Expected to Close in the 2023 Fourth Quarter

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

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, “I am pleased with our favorable second quarter performance and the progress we are making despite a difficult operating environment. During the second quarter, we increased net income and earnings per share from first quarter levels, maintained excellent asset quality, and achieved record net loans, LCNB Wealth Management assets, and total assets. In addition, our flexible balance sheet and solid capital levels allowed us to support our organic growth strategies and return capital back to our shareholders.”

“While we expect the challenging banking landscape to persist throughout the second half of 2023, we remain focused on managing the factors under our control. This includes controlling operating expenses, managing our balance sheet, maintaining excellent asset quality, and supporting our local communities. In addition, we continue to make progress completing the acquisition of Cincinnati Bancorp, which is expected to close during the 2023 fourth quarter. Once finalized, we expect LCNB will have total assets of approximately $2.3 billion with 33 banking offices in Ohio and one branch office in Northern Kentucky. With an expanded position within the greater Cincinnati and Northern Kentucky markets, we believe this transaction should enhance LCNB’s long-term profitability metrics and earnings growth rate in the future. We are excited to complete the acquisition and welcome Cincinnati Bancorp’s customers, employees, and shareholders to LCNB,” concluded Mr. Meilstrup.

Income Statement

Net income for the 2023 second quarter was $4,694,000, compared to $5,618,000 for the same period last year. Earnings per basic and diluted share for the 2023 second quarter were $0.42, compared to $0.49 for the same period last year. Net income for the six-month period ended June 30, 2023 was $8,851,000, compared to $10,141,000 for the same period last year. Earnings per basic and diluted share for the six-month period ended June 30, 2023 were $0.79, compared to $0.87 for the same period last year.

Adjusted net income for the 2023 second quarter was $5.0 million, or $0.45 per diluted share, compared to $5.6 million, or $0.49 per diluted share, in the prior year quarter. 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 first half ended June 30, 2023 was $9.2 million, or $0.82 per diluted share, compared to $10.1 million, or $0.87 per diluted share, in the prior year period.

Net interest income for the three months ended June 30, 2023 was $14,177,000, compared to $15,167,000 for the comparable period in 2022. Net interest income for the six-month period ended June 30, 2023 was $28,119,000, as compared to $29,390,000 in the same period last year. Contributing to the variances for both the three and six-month periods were increases in the amount of short-term borrowings combined with higher interest expense associated with the rapid year-over-year increase in the Effective Federal Funds Rate. For the 2023 second quarter, LCNB’s tax equivalent net interest margin was 3.28%, compared to 3.54% for the same period last year.

Non-interest income for the three months ended June 30, 2023 increased $118,000, or by 3.3%, to $3,646,000, compared to $3,528,000 for the same period last year. For the six months ended June 30, 2023, non-interest income increased $149,000, or by 2.1%, to $7,227,000, compared to $7,078,000 for the same period last year. The increase in non-interest income for both the three and six-month periods were primarily due to higher fiduciary income and a decrease in net unrealized losses recognized on equity securities, partially offset by lower gains on sales of loans. Also contributing to the increase during the six-month period were gains recognized on the sale of equity securities during the 2023 first quarter.

Non-interest expense for the three months ended June 30, 2023 was $609,000 greater than the comparable period in 2022, primarily due to $415,000 in one-time merger-related expenses. For the first half ended June 30, 2023, non-interest expense was $884,000 higher than the comparable period in 2022, partially due to $440,000 in merger-related expenses. In addition, non-interest expense for the 2022 second quarter benefited from an $889,000 gain from the sale of other real estate owned.

Capital Allocation

During the 2023 second quarter, LCNB invested $1.5 million to repurchase 92,885 shares of its outstanding stock at an average price of $15.86 per share. Year-to-date, 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 June 30, 2023, LCNB had 315,047 shares remaining under its February 2023 share repurchase program. For the second quarter ended June 30, 2023, LCNB paid $0.21 per share in dividends, a 5.0% increase from $0.20 per share for the second quarter last year. Year-to-date, LCNB paid $0.42 per share in dividends, compared to $0.40 per share for the first half last year.

Balance Sheet

Total assets at June 30, 2023 increased 1.9% to a record $1.95 billion from $1.91 billion at June 30, 2022. Net loans at June 30, 2023 increased 4.7% to a record $1.43 billion, compared to $1.37 billion at June 30, 2022.

Total deposits at June 30, 2023 decreased 3.7% to $1.60 billion, compared to $1.66 billion at June 30, 2022, as LCNB experienced greater competition for deposit accounts. LCNB’s uninsured deposits to total deposits was approximately 11.7% for the quarter ended June 30, 2023.

Assets Under Management

Total assets managed at June 30, 2023 were a record $3.23 billion, compared to $3.04 billion at June 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 associated with an improving capital market environment, partially offset by decreases in cash management accounts and mortgage loans serviced.

Asset Quality

For the 2023 second quarter, the total provision for credit losses was $30,000, compared to a total provision for credit losses of $377,000 for the 2022 second quarter. For the six months ended June 30, 2023, LCNB recorded a total recovery of credit losses of $27,000, compared to a total provision for credit losses of $426,000 for the six months ended June 30, 2022.

Net charge-offs for the 2023 second quarter were $33,000, or 0.01% of average loans, compared to net charge-offs of $74,000, or 0.02% of average loans, for the same period last year. For the 2023 six-month period, net charge-offs were $49,000, or 0.01% of average loans, compared to net charge-offs of $99,000, or 0.03% of average loans, for the 2022 six-month period.

Total nonperforming loans, which includes non-accrual loans and loans past due 90 days or more and still accruing interest, increased $111,000 from $599,000 or 0.04% of total loans at June 30, 2022, to $710,000 or 0.05% of total loans at June 30, 2023. Nonperforming assets to total assets was 0.04% at June 30, 2023, compared to 0.03% at June 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. When completed, the transaction will significantly increase LCNB’s existing presence in the Cincinnati market and expand LCNB’s community banking franchise across the Ohio River into the Northern Kentucky market.

Subject to the terms of the merger agreement, which has been approved by the Board of Directors of each company, CNNB shareholders will have 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. Subject to regulatory approval, CNNB shareholder approval, and other customary conditions set forth in the definitive merger agreement, the transaction is anticipated to close in the fourth quarter of 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. 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. the uncertainties for LCNB's business, results of operations and financial condition resulting from the recovery from the COVID-19 pandemic;
3. LCNB’s ability to integrate future acquisitions may be unsuccessful or may be more difficult, time-consuming, or costly than expected;
4. LCNB may incur increased loan charge-offs in the future and the allowance for credit losses may be inadequate;
5. LCNB may face competitive loss of customers;
6. 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;
7. changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
8. 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;
9. LCNB may experience difficulties growing loan and deposit balances;
10. 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;
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, and the Tax Cuts and Jobs Act, 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																	Six Months Ended
	06-30-2023				03-31-2023			12-31-2022			09-30-2022			06-30-2022				06-30-2023				06-30-2022
Condensed Income Statement
Interest income	$	18,703			17,918			17,719			16,704				16,208				36,621				31,330
Interest expense		4,526			3,976			1,511			1,260				1,041				8,502				1,940
Net interest income		14,177			13,942			16,208			15,444				15,167				28,119				29,390
Provision for (recovery of) credit losses		30			(57	)		(19	)		(157	)			377				(27	)			426
Net interest income after provision for (recovery of) credit losses		14,147			13,999			16,227			15,601				14,790				28,146				28,964
Non-interest income		3,646			3,581			3,629			3,581				3,528				7,227				7,078
Non-interest expense		12,078			12,525			12,065			12,350				11,469				24,603				23,719
Income before income taxes		5,715			5,055			7,791			6,832				6,849				10,770				12,323
Provision for income taxes		1,021			898			1,383			1,253				1,231				1,919				2,182
Net income	$	4,694			4,157			6,408			5,579				5,618				8,851				10,141
Supplemental Income Statement Information
Amort/Accret income on acquired loans	$	—			74			249			144				61				74				127
Tax-equivalent net interest income	$	14,223			13,989			16,257			15,495				15,217				28,212				29,490
Per Share Data
Dividends per share	$	0.21			0.21			0.21			0.20				0.20				0.42				0.40
Basic earnings per common share	$	0.42			0.37			0.57			0.49				0.49				0.79				0.87
Diluted earnings per common share	$	0.42			0.37			0.57			0.49				0.49				0.79				0.87
Book value per share	$	18.20			18.22			17.82			17.31				17.84				18.20				17.84
Tangible book value per share	$	12.81			12.86			12.48			11.97				12.53				12.81				12.53
Weighted average common shares outstanding:
Basic		11,056,308			11,189,170			11,211,328			11,284,225				11,337,805				11,122,371				11,576,873
Diluted		11,056,308			11,189,170			11,211,328			11,284,225				11,337,805				11,122,371				11,576,873
Shares outstanding at period end		11,116,080			11,202,063			11,259,080			11,293,639				11,374,515				11,116,080				11,374,515
Selected Financial Ratios
Return on average assets		0.98	%		0.88	%		1.34	%		1.15	%			1.18	%			0.93	%			1.07	%
Return on average equity		9.22	%		8.33	%		12.90	%		10.80	%			10.96	%			8.78	%			9.48	%
Return on average tangible common equity		13.07	%		11.85	%		18.59	%		15.30	%			15.52	%			12.46	%			13.18	%
Dividend payout ratio		50.00	%		56.76	%		36.84	%		40.82	%			40.82	%			53.16	%			45.98	%
Net interest margin (tax equivalent)		3.28	%		3.28	%		3.77	%		3.54	%			3.54	%			3.28	%			3.45	%
Efficiency ratio (tax equivalent)		67.59	%		71.29	%		60.67	%		64.74	%			61.18	%			69.42	%			64.86	%
Selected Balance Sheet Items
Cash and cash equivalents	$	26,020			31,876			22,701			29,460				31.815
Debt and equity securities		314,763			328,194			323,167			325,801				337,952
Loans:
Commercial and industrial	$	127,553			124,240			120,236			114,694				114,971
Commercial, secured by real estate		961,173			932,208			938,022			908,130				905,703
Residential real estate		312,338			303,051			305,575			316,669				315,930
Consumer		29,007			28,611			28,290			29,451				30,308
Agricultural		9,955			7,523			10,054			8,630				7,412
Other, including deposit overdrafts		69			62			81			52				81
Deferred net origination fees		(844	)		(865	)		(980	)		(937	)			(928	)
Loans, gross		1,439,251			1,394,830			1,401,278			1,376,689				1,373,477
Less allowance for credit losses on loans		7,956			7,858			5,646			5,644				5,833
Loans, net	$	1,431,295			1,386,972			1,395,632			1,371,045				1,367,644
	Three Months Ended																	Six Months Ended
	06-30-2023				03-31-2023			12-31-2022			09-30-2022			06-30-2022				06-30-2023				06-30-2022
Selected Balance Sheet Items, continued
Allowance for Credit Losses on Loans:
Allowance for credit losses, beginning of period	$	7,858			5,646			5,644			5,833				5,530
Cumulative change in accounting principle; adoption of ASU 2016-13		—			2,196			—			—				—
Provision for (recovery of) credit losses		131			32			(19	)		(157	)			377
Losses charged off		(49	)		(36	)		(60	)		(53	)			(116	)
Recoveries		16			20			81			21				42
Allowance for credit losses, end of period	$	7,956			7,858			5,646			5,644				5,833
Total earning assets	$	1,756,157			1,736,829			1,726,902			1,714,196			$	1,722,853
Total assets		1,950,763			1,924,531			1,919,121			1,904,700				1,912,901
Total deposits		1,596,709			1,603,881			1,604,970			1,657,370				1,658,825
Short-term borrowings		112,289			76,500			71,455			4,000				5,000
Long-term debt		18,122			18,598			19,072			24,539				25,000
Total shareholders’ equity		202,316			204,072			200,675			195,439				202,960
Equity to assets ratio		10.37	%		10.60	%		10.46	%		10.26	%			10.61	%
Loans to deposits ratio		90.14	%		86.97	%		87.31	%		83.06	%			82.80	%
Tangible common equity (TCE)	$	142,362			144,006			140,498			135,149				142,557
Tangible common assets (TCA)		1,890,809			1,864,465			1,858,944			1,844,410				1,852,224
TCE/TCA		7.53	%		7.72	%		7.56	%		7.33	%			7.70	%
Selected Average Balance Sheet Items
Cash and cash equivalents	$	30,742			35,712			24,330			35,763			$	28,787			$	33,205			$	30,788
Debt and equity securities		321,537			327,123			323,195			338,299				338,149				324,320				339,432
Loans	$	1,405,939			1,389,385			1,383,809			1,384,520			$	1,375,710			$	1,397,708			$	1,376,315
Less allowance for credit losses on loans		7,860			7,522			5,647			5,830				5,532				7,692				5,517
Net loans	$	1,398,079			1,381,863			1,378,162			1,378,690			$	1,370,178			$	1,390,016			$	1,370,798
Total earning assets	$	1,737,256			1,729,008			1,711,524			1,736,031				1,722,503				1,733,160				1,724,938
Total assets		1,927,957			1,921,742			1,903,338			1,928,868				1,912,574				1,925,004				1,915,051
Total deposits		1,604,346			1,583,857			1,637,201			1,669,932				1,655,389				1,594,159				1,651,032
Short-term borrowings		79,485			94,591			21,433			5,728				18,263				86,996				15,399
Long-term debt		18,514			18,983			23,855			24,920				12,637				18,747				11,326
Total shareholders’ equity		204,085			202,419			197,014			205,051				205,645				203,257				215,629
Equity to assets ratio		10.59	%		10.53	%		10.35	%		10.63	%			10.75	%			10.56	%			11.26	%
Loans to deposits ratio		87.63	%		87.72	%		84.52	%		82.91	%			83.10	%			87.68	%			83.36	%
Asset Quality
Net charge-offs (recoveries)	$	33			16			(21	)		32				74				49				99
Other real estate owned		—			—			—			—				—				—				—
Non-accrual loans	$	454			701			391			465				599				454				599
Loans past due 90 days or more and still accruing		256			—			39			—				0				256				—
Total nonperforming loans	$	710			701			430			465				599				710				599
Net charge-offs (recoveries) to average loans		0.01	%		0.00	%		(0.01	)%		0.01	%			0.02	%			0.01	%			0.03	%
Allowance for credit losses on loans to total loans		0.55	%		0.56	%		0.40	%		0.41	%			0.42	%
Nonperforming loans to total loans		0.05	%		0.05	%		0.03	%		0.03	%			0.04	%
Nonperforming assets to total assets		0.04	%		0.04	%		0.02	%		0.02	%			0.03	%
	Three Months Ended																	Six Months Ended
	06-30-2023				03-31-2023			12-31-2022			09-30-2022			06-30-2022				06-30-2023				06-30-2022
Assets Under Management
LCNB Corp. total assets	$	1,950,763			1,924,531			1,919,121			1,904,700				1,912,901
Trust and investments (fair value)		744,149			716,578			678,366			611,409				625,984
Mortgage loans serviced		143,093			142,167			148,412			145,317				153,557
Cash management		2,668			1,831			1,925			53,199				38,914
Brokerage accounts (fair value)		384,889			374,066			347,737			314,144				303,663
Total assets managed		3,225,562			3,159,173			3,095,561			3,028,769				3,035,019
Reconciliation of Net Income Less Tax-Effected Merger-Related Costs
Net income	$	4,694			4,157			6,408			5,579				5,618				8,851				10,141
Merger-related costs		415			25			—			—				—				440				—
Tax effect		(63	)		(4	)		—			—				—				(67	)			—
Adjusted net income	$	5,046			4,178			6,408			5,579				5,618				9,224				10,141
Adjusted basic and diluted earnings per share	$	0.45			0.37			0.57			0.49				0.49				0.82				0.87
Adjusted return on average assets		1.05	%		0.88	%		1.34	%		1.15	%			1.18	%			0.97	%			1.07	%
Adjusted return on average equity		9.92	%		8.37	%		12.90	%		10.80	%			10.96	%			9.15	%			9.48	%

LCNB CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS   (Dollars in thousands)
	June 30, 2023 (Unaudited)				December 31, 2022
ASSETS:
Cash and due from banks	$	23,877			20,244
Interest-bearing demand deposits		2,143			2,457
Total cash and cash equivalents		26,020			22,701
Investment securities:
Equity securities with a readily determinable fair value, at fair value		1,279			2,273
Equity securities without a readily determinable fair value, at cost		2,099			2,099
Debt securities, available-for-sale, at fair value		281,156			289,850
Debt securities, held-to-maturity, at cost, net of allowance for credit losses		19,117			19,878
Federal Reserve Bank stock, at cost		4,652			4,652
Federal Home Loan Bank stock, at cost		6,460			4,415
Loans, net of allowance for credit losses		1,431,295			1,395,632
Premises and equipment, net		33,145			33,042
Operating leases right of use asset		6,260			6,525
Goodwill		59,221			59,221
Core deposit and other intangibles		1,497			1,827
Bank owned life insurance		44,846			44,298
Interest receivable		7,811			7,482
Other assets		25,905			25,503
TOTAL ASSETS	$	1,950,763			1,919,398
LIABILITIES:
Deposits:
Noninterest-bearing	$	480,288			505,824
Interest-bearing		1,116,421			1,099,146
Total deposits		1,596,709			1,604,970
Short-term borrowings		112,289			71,455
Long-term debt		18,122			19,072
Operating lease liabilities		6,434			6,647
Allowance for credit losses on off-balance sheet credit exposures		381			—
Accrued interest and other liabilities		14,512			16,579
TOTAL LIABILITIES		1,748,447			1,718,723
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Preferred shares – no par value, authorized 1,000,000 shares, none outstanding		123,422			122,839
Common shares –no par value, authorized 19,000,000; issued 14,327,463 and 14,270,550 shares at June 30, 2023 and December 31, 2022, respectively; outstanding 11,116,080 and 11,259,080 shares at March 31, 2023 and December 31, 2022, respectively		21,249			21,230
Retained earnings		141,431			139,249
Treasury shares at cost, 3,211,383 and 3,011,470 shares at June 30, 2023 and December 31, 2022, respectively		(56,015	)		(52,689	)
Accumulated other comprehensive loss, net of taxes		(27,771	)		(29,954	)
TOTAL SHAREHOLDERS' EQUITY		202,316			200,675
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,950,763			1,919,398

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,
	2023				2022			2023			2022
INTEREST INCOME:
Interest and fees on loans	$	16,763			14,548			32,906			28,334
Dividends on equity securities with a readily determinable fair value		8			14			25			26
Dividends on equity securities without a readily determinable fair value		30			5			50			10
Interest on debt securities, taxable		1,323			1,254			2,666			2,349
Interest on debt securities, non-taxable		174			188			350			377
Other investments		405			199			624			234
TOTAL INTEREST INCOME		18,703			16,208			36,621			31,330
INTEREST EXPENSE:
Interest on deposits		3,335			775			5,791			1,514
Interest on short-term borrowings		1,008			163			2,312			249
Interest on long-term debt		183			103			399			177
TOTAL INTEREST EXPENSE		4,526			1,041			8,502			1,940
NET INTEREST INCOME		14,177			15,167			28,119			29,390
Provision for credit losses on loans		132			377			164			426
Provision for (recovery of) credit losses on debt securities, held-to-maturity		(1	)		—			(1	)		—
Recovery of credit losses on off-balance sheet credit exposures		(101	)		—			(190	)		—
TOTAL PROVISION FOR (RECOVERY OF) CREDIT LOSSES		30			377			(27	)		426
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) CREDIT LOSSES		14,147			14,790			28,146			28,964
NON-INTEREST INCOME:
Fiduciary income		1,787			1,643			3,527			3,338
Service charges and fees on deposit accounts		1,445			1,546			2,927			2,952
Bank owned life insurance income		277			269			548			534
Gains from sales of loans		3			64			9			188
Other operating income		134			6			216			66
TOTAL NON-INTEREST INCOME		3,646			3,528			7,227			7,078
NON-INTEREST EXPENSE:
Salaries and employee benefits		7,061			7,014			14,410			14,229
Equipment expenses		417			428			778			836
Occupancy expense, net		599			735			1,562			1,510
State financial institutions tax		396			437			793			873
Marketing		320			368			512			630
Amortization of intangibles		112			112			223			252
FDIC insurance premiums, net		224			134			439			260
Contracted services		666			679			1,307			1,289
Other real estate owned, net		1			(879	)		2			(879	)
Merger-related expenses		415			—			440			—
Other non-interest expense		1,867			2,441			4,137			4,719
TOTAL NON-INTEREST EXPENSE		12,078			11,469			24,603			23,719
INCOME BEFORE INCOME TAXES		5,715			6,849			10,770			12,323
PROVISION FOR INCOME TAXES		1,021			1,231			1,919			2,182
NET INCOME	$	4,694			5,618			8,851			10,141
		2023			2022			2023			2022
Earnings per common share:
Basic		0.42			0.49			0.79			0.87
Diluted		0.42			0.49			0.79			0.87
Weighted average common shares outstanding:
Basic		11,056,308			11,337,805			11,122,371			11,576,873
Diluted		11,056,308			11,337,805			11,122,371			11,576,873

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230720470049/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 the financial results for LCNB in the second quarter of 2023?

LCNB reported favorable second quarter performance with increased net loans and LCNB Wealth Management assets.

What is the status of the acquisition of Cincinnati Bancorp?

The acquisition is expected to close in the fourth quarter of 2023.

How did net income for the second quarter of 2023 compare to the same period last year?

Net income for Q2 2023 decreased compared to the same period last year.

What is the loan to deposit ratio for LCNB?

The loan to deposit ratio is 90.14%.

What is the asset quality of LCNB?

LCNB has excellent asset quality with total nonperforming loans to total loans of 0.05% at June 30, 2023.

What is the expected impact of the acquisition of Cincinnati Bancorp on LCNB's profitability?

The acquisition is expected to enhance LCNB's long-term profitability metrics and earnings growth rate in the future.