Business Wire | Jul 22, 2021 06:00AM EDT

LCNB Corp. Reports Record Financial Results For The Three and Six Months Ended June 30, 2021

Jul. 22, 2021

LEBANON, Ohio--(BUSINESS WIRE)--Jul. 22, 2021--LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three and six months ended June 30, 2021.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, "LCNB achieved record second quarter earnings, driven by continued growth in total assets managed and strong asset quality. Growing assets, controlling risk, and diversifying revenue has helped LCNB successfully navigate the current low interest rate environment. Fee income generated from the Paycheck Protection Program ("PPP") also contributed $402,000 to our record second quarter earnings as we processed $10.4 million of loan forgiveness under the program during the quarter. PPP loans continue to wind down and our loan portfolio included $23.8 million of PPP loans at June 30, 2021. In addition, we continue to benefit from robust fiduciary income associated with our rapidly growing wealth management business and, for the second quarter 2021, fiduciary income increased 44.5% over the prior year period to a quarterly record of $1.7 million."

Mr. Meilstrup continued, "Average net loans are up both sequentially and year-over-year, despite the $46 million of PPP loans forgiven over the past 12 months, which is a testament to our local presence and the value we provide customers within our compelling Ohio markets. In addition, while the competition for loans is high, we remain disciplined with our approach to risk and pricing of loans. As a result, our asset quality is robust as total non-performing loans are in line with pre-pandemic levels and net charge-offs continue to be limited. At June 30, 2021, we only had one $10.4 million relationship still in a COVID-19 deferral status, which is a 97.3% decline from the balance of COVID-19 deferrals at June 30, 2020.

1 Total Assets Managed includes LCNB Corp. Consolidated Assets, LCNB Wealth Management Assets (Trust and Investments and Brokerage accounts), Loans Serviced for Others, and Cash Management Services.

"We continue to focus on strategies that support our growth opportunities, increase operating efficiencies, improve our customer engagement, and enhance our digital resources. We continue to develop and retain proven bankers and financial professionals throughout our organization. Additionally, we continue to attract new talent and we recently enhanced our commercial lending presence to pursue additional loan opportunities within Northern Kentucky. We also recently rebranded our investment and trust services to LCNB Wealth, which is an important component of our enhanced go to market and cross-selling strategies. Overall, I am extremely pleased with the progress we are making and excited by the direction we are headed," concluded Mr. Meilstrup.

Net income for the 2021 second quarter was $5,290,000, compared to $5,057,000 for the same period last year. Earnings per basic and diluted share for the 2021 second quarter were $0.41, compared to $0.39 for the same period last year. Net income for the six-month period ended June 30, 2021, was $10,530,000, compared to $10,083,000 for the same period last year. Earnings per basic and diluted share for the six-month period ended June 30, 2021, were $0.82, compared to $0.78 for the same period last year.

Net interest income for the three months ended June 30, 2021, was $14,369,000, compared to $13,998,000 for the comparable period in 2020. Net interest income for the six-month period ended June 30, 2021, increased $565,000 to $28,741,000, as compared to $28,176,000 in the same period last year. Favorably contributing to the variances for both the three- and six- month periods were fees recognized from PPP loans and market driven decreases in the average rates paid on deposits, aided by a shift from higher cost certificates of deposit to lower cost demand and savings products.

Non-interest income for the three months ended June 30, 2021, increased $995,000 or by 30.0% to $4,314,000, compared to $3,319,000 for the same period last year. For the six months ended June 30, 2021, non-interest income increased $621,000 or by 8.7% to $7,779,000, compared to $7,158,000 for the same period last year. The primary drivers of the second quarter and first half year-over-year increases in non-interest income were increased fiduciary income, deposit service charges, and a one-time refund for the Company's Ohio Financial Institution taxes, which was included in other operating income.

Non-interest expense for the three months ended June 30, 2021, was $1,092,000 greater than the comparable period in 2020 primarily due to increases in salaries and employee benefits, equipment, marketing, FDIC insurance, contracted services, and other non-interest expenses. For the first half ended June 30, 2021, non-interest expense increased $1,512,000 from the comparable period in 2020.

Asset Quality

For the 2021 second quarter, LCNB recorded a $15,000 credit for loan losses, compared to a provision of $16,000 for the 2020 second quarter. For the six months ended June 30, 2021, LCNB recognized a credit for loan losses of $67,000, compared to a provision of $1,189,000 for the six months ended June 30, 2020. The $1,256,000 year-over-year improvement in the provision for loan losses was partially due to strong asset quality and last year's proactive build in the Company's allowance for loan losses associated with the potential economic impacts caused by the COVID-19 pandemic.

Net charge-offs for the 2021 second quarter were $12,000, compared to $8,000 for the same period last year. For the 2021 six-month period, net charge-offs were $9,000, compared to $218,000 or 0.03% of average loans for the 2020 six-month period.

Non-accrual loans and loans past due 90 days or more and still accruing interest decreased $576,000, from $3,914,000 or 0.29% of total loans at June 30, 2020, to $3,338,000 or 0.25% of total loans at June 30, 2021. Nonperforming assets to total assets was 0.18% at June 30, 2021, compared to 0.23% at June 30, 2020.

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, digital 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(r) 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, 2020, 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:

* the success, impact, and timing of the implementation of LCNB's business strategies; * the significant risks and uncertainties for LCNB's business, results of operations and financial condition, as well as its regulatory capital and liquidity ratios and other regulatory requirements, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its influence on financial markets, the effectiveness of LCNB's work from home arrangements and staffing levels in operational facilities, the impact of market participants on which LCNB relies, and actions taken by governmental authorities and other third parties in response to the pandemic; * the disruption of global, national, state, and local economies associated with the COVID-19 pandemic, which could affect LCNB's liquidity and capital positions, impair the ability of our borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses; * LCNB's ability to integrate future acquisitions may be unsuccessful, or may be more difficult, time-consuming, or costly than expected; * LCNB may incur increased loan charge-offs in the future; * LCNB may face competitive loss of customers; * changes in the interest rate environment may have results on LCNB's operations materially different from those anticipated by LCNB's market risk management functions; * changes in general economic conditions and increased competition could adversely affect LCNB's operating results; * 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; * LCNB may experience difficulties growing loan and deposit balances; * 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; * deterioration in the financial condition of the U.S. banking system may impact the valuations of investments LCNB has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments; * difficulties with technology or data security breaches, including cyberattacks, that could negatively affect LCNB's ability to conduct business and its relationships with customers, vendors, and others; * adverse weather events and natural disasters and global and/or national epidemics; and * government intervention in the U.S. financial system, including the effects of recent 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, and the Tax Cuts and Jobs Act. 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 SubsidiariesFinancial Highlights(Dollars in thousands, except per share amounts)(Unaudited)

Three Months Ended Six Months Ended

6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 6/30/2021 6/30/2020

Condensed Income Statement

Interest income $ 15,429 $ 15,535 15,945 15,322 15,957 30,964 32,513

Interest expense 1,060 1,163 1,432 1,793 1,959 2,223 4,337

Net interest 14,369 14,372 14,513 13,529 13,998 28,741 28,176 income

Provision(credit) for (15 ) (52 ) (151 ) 976 16 (67 ) 1,189 loan losses

Net interestincome after 14,384 14,424 14,664 12,553 13,982 28,808 26,987 provision(credit)

Non-interest 4,314 3,465 4,305 4,278 3,319 7,779 7,158 income

Non-interest 12,208 11,492 11,944 11,653 11,116 23,700 22,188 expense

Income before 6,490 6,397 7,025 5,178 6,185 12,887 11,957 income taxes

Provision for 1,200 1,157 1,283 928 1,128 2,357 1,874 income taxes

Net income $ 5,290 $ 5,240 5,742 4,250 5,057 10,530 10,083

Amort/Accretincome on $ 216 $ 249 186 181 294 465 961 acquired loans

Amort/Accretexpenses onacquired $ - $ - 1 - 2 - 4 interest-bearingliabilities

Tax-equivalentnet interest $ 14,427 $ 14,432 14,577 13,594 14,066 28,858 28,319 income



Per Share Data

Dividends per $ 0.19 $ 0.19 0.19 0.18 0.18 0.38 0.36 share

Basic earnings $ 0.41 $ 0.41 0.44 0.33 0.39 0.82 0.78 per common share

Diluted earnings $ 0.41 $ 0.41 0.44 0.33 0.39 0.82 0.78 per common share

Book value per $ 18.99 $ 18.66 18.73 18.46 18.27 18.99 18.27 share

Tangible book $ 14.15 $ 13.87 13.93 13.66 13.47 14.15 13.47 value per share

Weighted average common shares outstanding:

Basic 12,743,726 12,794,824 12,852,614 12,937,865 12,940,975 12,769,131 12,933,528

Diluted 12,743,726 12,794,852 12,852,657 12,937,901 12,941,001 12,769,146 12,934,158

Sharesoutstanding at 12,634,845 12,820,108 12,858,325 12,926,686 12,975,879 12,634,845 12,975,879 period end



Selected Financial Ratios

Return on 1.15 % 1.20 % 1.31 % 0.97 % 1.19 % 1.17 % 1.21 %average assets

Return on 8.78 % 8.80 % 9.52 % 7.08 % 8.63 % 8.79 % 8.69 %average equity

Return onaverage tangible 11.76 % 11.81 % 12.83 % 9.56 % 11.74 % 11.79 % 11.92 %equity

Dividend payout 46.34 % 46.34 % 43.18 % 54.55 % 46.15 % 46.34 % 46.15 %ratio

Net interestmargin (tax 3.51 % 3.68 % 3.71 % 3.47 % 3.70 % 3.57 % 3.81 %equivalent)

Efficiency ratio 65.14 % 64.21 % 63.26 % 65.20 % 63.94 % 64.69 % 62.54 %(tax equivalent)



Selected Balance Sheet Items

Cash and cash $ 22,909 $ 41,144 31,730 24,485 42,736 equivalents

Debt and equity 349,199 276,774 248,624 199,044 194,883 securities



Loans:

Commercial and $ 97,240 $ 107,630 100,254 124,628 125,492 industrial

Commercial,secured by real 836,085 855,894 843,230 843,943 833,286 estate

Residential real 341,447 328,265 309,692 327,689 334,349 estate

Consumer 35,257 35,799 36,917 36,504 32,859

Agricultural 8,765 8,698 10,100 8,920 11,071

Other, includingdeposit 369 346 363 403 283 overdrafts

Deferred net (1,398 ) (1,531 ) (1,135 ) (1,927 ) (1,902 ) origination fees

Loans, gross 1,317,765 1,335,101 1,299,421 1,340,160 1,335,438

Less allowance 5,652 5,679 5,728 5,974 5,016 for loan losses

Loans, net $ 1,312,113 $ 1,329,422 1,293,693 1,334,186 1,330,422



Total earning $ 1,671,462 $ 1,634,818 1,562,392 1,547,538 1,554,537 assets

Total assets 1,856,670 1,818,321 1,745,884 1,725,615 1,735,332

Three Months Ended

Six Months Ended

6/30/2021

3/31/2021

12/31/2020

9/30/2020

6/30/2020

6/30/2021

6/30/2020

Selected Balance Sheet Items, continued

Total deposits

1,577,345

1,537,116

1,455,423

1,430,394

1,438,921

Short-term borrowings

-

-

-

-

-

Long-term debt

15,000

17,000

22,000

31,999

33,998

Total shareholders' equity

239,952

239,246

240,825

238,585

237,047

Equity to assets ratio

12.92

%

13.16

%

13.79

%

13.83

%

13.66

%

Loans to deposits ratio

83.54

%

86.86

%

89.28

%

93.69

%

92.81

%

Tangible common equity (TCE)

$

178,771

$

177,805

179,127

176,624

174,823

Tangible common assets (TCA)

1,795,489

1,756,880

1,684,186

1,663,654

1,673,108

TCE/TCA

9.96

%

10.12

%

10.64

%

10.62

%

10.45

%

Selected Average Balance Sheet Items

Cash and cash equivalents

$

45,414

$

37,269

49,273

42,661

46,292

41,385

35,712

Debt and equity securities

312,596

260,147

218,816

197,788

182,371

286,517

193,642

Loans

$

1,328,760

$

1,313,803

1,313,892

1,339,608

1,318,753

1,321,323

1,285,654

Less allowance for loan losses

5,678

5,715

5,920

5,250

4,998

5,696

4,468

Net loans

$

1,323,082

$

1,308,088

1,307,972

1,334,358

1,313,755

1,315,627

1,281,186

Total earning assets

$

1,666,126

$

1,589,582

1,561,392

1,558,886

1,528,610

1,628,066

1,495,779

Total assets

1,852,035

1,775,154

1,742,947

1,741,998

1,704,303

1,813,888

1,671,394

Total deposits

1,570,070

1,488,156

1,447,217

1,445,573

1,412,082

1,529,339

1,379,426

Short-term borrowings

716

342

-

-

82

530

749

Long-term debt

15,571

19,689

30,803

33,020

34,964

17,619

36,644

Total shareholders' equity

241,651

241,517

239,881

238,990

235,587

241,585

233,322

Equity to assets ratio

13.05

%

13.61

%

13.76

%

13.72

%

13.82

%

13.32

%

13.96

%

Loans to deposits ratio

84.63

%

88.28

%

90.79

%

92.67

%

93.39

%

86.40

%

93.20

%

Asset Quality

Net charge-offs (recoveries)

$

12

$

(3

)

95

18

8

9

218

Other real estate owned

-

-

-

-

-

-

-

Non-accrual loans

3,338

3,365

3,718

4,110

3,876

3,338

3,876

Loans past due 90 days or more and still accruing

-

-

-

94

38

-

38

Total nonperforming loans

$

3,338

$

3,365

3,718

4,204

3,914

3,338

3,914

Net charge-offs to average loans

0.00

%

0.00

%

0.03

%

0.01

%

0.00

%

0.00

%

0.03

%

Allowance for loan losses to total loans

0.43

%

0.43

%

0.44

%

0.45

%

0.38

%

0.43

%

0.38

%

Nonperforming loans to total loans

0.25

%

0.25

%

0.29

%

0.31

%

0.29

%

0.25

%

0.29

%

Nonperforming assets to total assets

0.18

%

0.19

%

0.21

%

0.24

%

0.23

%

0.18

%

0.23

%

Assets Under Management

LCNB Corp. total assets

$

1,856,670

$

1,818,321

1,745,884

1,725,615

1,735,332

Trust and investments (fair value)

701,838

673,742

628,414

524,502

516,076

Mortgage loans serviced

126,924

127,290

137,188

120,546

100,189

Cash management

80,177

118,494

116,792

119,520

116,615

Brokerage accounts (fair value)

314,491

299,355

292,953

267,307

255,276

Total assets managed

$

3,080,100

$

3,037,202

2,921,231

2,757,490

2,723,488

Three Months Ended Six Months Ended

6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 6/30/2021 6/30/2020

Selected Balance Sheet Items, continued

Total 1,577,345 1,537,116 1,455,423 1,430,394 1,438,921 deposits

Short-term - - - - - borrowings

Long-term 15,000 17,000 22,000 31,999 33,998 debt

Totalshareholders' 239,952 239,246 240,825 238,585 237,047 equity

Equity to 12.92 % 13.16 % 13.79 % 13.83 % 13.66 % assets ratio

Loans todeposits 83.54 % 86.86 % 89.28 % 93.69 % 92.81 % ratio



Tangiblecommon equity $ 178,771 $ 177,805 179,127 176,624 174,823 (TCE)

Tangiblecommon assets 1,795,489 1,756,880 1,684,186 1,663,654 1,673,108 (TCA)

TCE/TCA 9.96 % 10.12 % 10.64 % 10.62 % 10.45 %







SelectedAverage Balance SheetItems

Cash and cash $ 45,414 $ 37,269 49,273 42,661 46,292 41,385 35,712 equivalents

Debt andequity 312,596 260,147 218,816 197,788 182,371 286,517 193,642 securities



Loans $ 1,328,760 $ 1,313,803 1,313,892 1,339,608 1,318,753 1,321,323 1,285,654

Lessallowance for 5,678 5,715 5,920 5,250 4,998 5,696 4,468 loan losses

Net loans $ 1,323,082 $ 1,308,088 1,307,972 1,334,358 1,313,755 1,315,627 1,281,186



Total earning $ 1,666,126 $ 1,589,582 1,561,392 1,558,886 1,528,610 1,628,066 1,495,779 assets

Total assets 1,852,035 1,775,154 1,742,947 1,741,998 1,704,303 1,813,888 1,671,394

Total 1,570,070 1,488,156 1,447,217 1,445,573 1,412,082 1,529,339 1,379,426 deposits

Short-term 716 342 - - 82 530 749 borrowings

Long-term 15,571 19,689 30,803 33,020 34,964 17,619 36,644 debt

Totalshareholders' 241,651 241,517 239,881 238,990 235,587 241,585 233,322 equity

Equity to 13.05 % 13.61 % 13.76 % 13.72 % 13.82 % 13.32 % 13.96 %assets ratio

Loans todeposits 84.63 % 88.28 % 90.79 % 92.67 % 93.39 % 86.40 % 93.20 %ratio



Asset Quality

Netcharge-offs $ 12 $ (3 ) 95 18 8 9 218 (recoveries)

Other real - - - - - - - estate owned



Non-accrual 3,338 3,365 3,718 4,110 3,876 3,338 3,876 loans

Loans pastdue 90 daysor more and - - - 94 38 - 38 stillaccruing

Totalnonperforming $ 3,338 $ 3,365 3,718 4,204 3,914 3,338 3,914 loans



Netcharge-offs 0.00 % 0.00 % 0.03 % 0.01 % 0.00 % 0.00 % 0.03 %to averageloans

Allowance forloan losses 0.43 % 0.43 % 0.44 % 0.45 % 0.38 % 0.43 % 0.38 %to totalloans

Nonperformingloans to 0.25 % 0.25 % 0.29 % 0.31 % 0.29 % 0.25 % 0.29 %total loans

Nonperformingassets to 0.18 % 0.19 % 0.21 % 0.24 % 0.23 % 0.18 % 0.23 %total assets



Assets Under Management

LCNB Corp. $ 1,856,670 $ 1,818,321 1,745,884 1,725,615 1,735,332 total assets

Trust andinvestments 701,838 673,742 628,414 524,502 516,076 (fair value)

Mortgageloans 126,924 127,290 137,188 120,546 100,189 serviced

Cash 80,177 118,494 116,792 119,520 116,615 management

Brokerageaccounts 314,491 299,355 292,953 267,307 255,276 (fair value)

Total assets $ 3,080,100 $ 3,037,202 2,921,231 2,757,490 2,723,488 managed



LCNB CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS(Dollars in thousands)

June 30, 2021 (Unaudited)

December 31, 2020

ASSETS:

Cash and due from banks

$

18,411

17,383

Interest-bearing demand deposits

4,498

14,347

Total cash and cash equivalents

22,909

31,730

Investment securities:

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

2,488

2,389

Equity securities without a readily determinable fair value, at cost

2,099

2,099

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

310,515

209,471

Debt securities, held-to-maturity, at cost

24,242

24,810

Federal Reserve Bank stock, at cost

4,652

4,652

Federal Home Loan Bank stock, at cost

5,203

5,203

Loans, net

1,312,113

1,293,693

Premises and equipment, net

35,356

35,376

Operating leases right of use asset

6,730

6,274

Goodwill

59,221

59,221

Core deposit and other intangibles

2,853

3,453

Bank owned life insurance

42,685

42,149

Interest receivable

8,395

8,337

Other assets

17,209

17,027

TOTAL ASSETS

$

1,856,670

1,745,884

LIABILITIES:

Deposits:

Noninterest-bearing

$

472,830

455,073

Interest-bearing

1,104,515

1,000,350

Total deposits

1,577,345

1,455,423

Long-term debt

15,000

22,000

Operating lease liabilities

6,846

6,371

Accrued interest and other liabilities

17,527

21,265

TOTAL LIABILITIES

1,616,718

1,505,059

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 14,201,728 and 14,163,904 shares at June 30, 2021 and December 31, 2020, respectively; outstanding 12,634,845 and 12,858,325 shares at June 30, 2021 and December 31, 2020, respectively

142,791

142,443

Retained earnings

120,720

115,058

Treasury shares at cost, 1,566,883 and 1,305,579 shares at June 30, 2021 and December 31, 2020, respectively

(25,122

)

(20,719

)

Accumulated other comprehensive income, net of taxes

1,563

4,043

TOTAL SHAREHOLDERS' EQUITY

239,952

240,825

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,856,670

1,745,884

LCNB CORP. AND SUBSIDIARIESCONSOLIDATED CONDENSED BALANCE SHEETS(Dollars in thousands)

June 30, 2021 December (Unaudited) 31, 2020

ASSETS:

Cash and due from banks $ 18,411 17,383

Interest-bearing demand deposits 4,498 14,347

Total cash and cash equivalents 22,909 31,730

Investment securities:

Equity securities with a readily determinable fair 2,488 2,389 value, at fair value

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

Debt securities, available-for-sale, at fair value 310,515 209,471

Debt securities, held-to-maturity, at cost 24,242 24,810

Federal Reserve Bank stock, at cost 4,652 4,652

Federal Home Loan Bank stock, at cost 5,203 5,203

Loans, net 1,312,113 1,293,693

Premises and equipment, net 35,356 35,376

Operating leases right of use asset 6,730 6,274

Goodwill 59,221 59,221

Core deposit and other intangibles 2,853 3,453

Bank owned life insurance 42,685 42,149

Interest receivable 8,395 8,337

Other assets 17,209 17,027

TOTAL ASSETS $ 1,856,670 1,745,884



LIABILITIES:

Deposits:

Noninterest-bearing $ 472,830 455,073

Interest-bearing 1,104,515 1,000,350

Total deposits 1,577,345 1,455,423

Long-term debt 15,000 22,000

Operating lease liabilities 6,846 6,371

Accrued interest and other liabilities 17,527 21,265

TOTAL LIABILITIES 1,616,718 1,505,059



COMMITMENTS AND CONTINGENT LIABILITIES - -



SHAREHOLDERS' EQUITY:

Preferred shares - no par value, authorized - - 1,000,000 shares, none outstanding

Common shares -no par value, authorized 19,000,000shares; issued 14,201,728 and 14,163,904 shares atJune 30, 2021 and December 31, 2020, respectively; 142,791 142,443 outstanding 12,634,845 and 12,858,325 shares atJune 30, 2021 and December 31, 2020, respectively

Retained earnings 120,720 115,058

Treasury shares at cost, 1,566,883 and 1,305,579shares at June 30, 2021 and December 31, 2020, (25,122 ) (20,719 )respectively

Accumulated other comprehensive income, net of 1,563 4,043 taxes

TOTAL SHAREHOLDERS' EQUITY 239,952 240,825

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,856,670 1,745,884

LCNB CORP. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF INCOME(Dollars in thousands, except per share data) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

INTEREST INCOME:

Interest and fees on loans

$

14,108

14,822

28,643

30,049

Dividends on equity securities with a readily determinable fair value

13

13

26

27

Dividends on equity securities without a readily determinable fair value

5

12

11

28

Interest on debt securities, taxable

905

667

1,623

1,617

Interest on debt securities, non-taxable

218

254

442

539

Other investments

180

189

219

253

TOTAL INTEREST INCOME

15,429

15,957

30,964

32,513

INTEREST EXPENSE:

Interest on deposits

945

1,732

1,973

3,849

Interest on short-term borrowings

1

-

2

7

Interest on long-term debt

114

227

248

481

TOTAL INTEREST EXPENSE

1,060

1,959

2,223

4,337

NET INTEREST INCOME

14,369

13,998

28,741

28,176

PROVISION (CREDIT) FOR LOAN LOSSES

(15

)

16

(6

)

1,189

NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES

14,384

13,982

28,808

26,987

NON-INTEREST INCOME:

Fiduciary income

1,735

1,201

3,264

2,304

Service charges and fees on deposit accounts

1,519

1,237

2,885

2,532

Net gains on sales of debt securities, available-for-sale

-

-

-

221

Bank owned life insurance income

269

287

536

888

Gains from sales of loans

151

317

194

437

Other operating income

640

277

900

776

TOTAL NON-INTEREST INCOME

4,314

3,319

7,779

7,158

NON-INTEREST EXPENSE:

Salaries and employee benefits

7,111

6,648

13,544

13,416

Equipment expenses

443

289

811

576

Occupancy expense, net

729

723

1,523

1,405

State financial institutions tax

437

420

881

856

Marketing

357

258

625

435

Amortization of intangibles

260

260

517

520

FDIC insurance premiums, net

123

31

236

30

Contracted services

623

475

1,163

877

Other non-interest expense

2,125

2,012

4,400

4,073

TOTAL NON-INTEREST EXPENSE

12,208

11,116

23,700

22,188

INCOME BEFORE INCOME TAXES

6,490

6,185

12,887

11,957

PROVISION FOR INCOME TAXES

1,200

1,128

2,357

1,874

NET INCOME

$

5,290

5,057

10,530

10,083

Dividends declared per common share

$

0.19

0.18

0.38

0.36

Earnings per common share:

Basic

0.41

0.39

0.82

0.78

Diluted

0.41

0.39

0.82

0.78

Weighted average common shares outstanding:

Basic

12,743,726

12,940,975

12,769,131

12,933,528

Diluted

12,743,726

12,941,001

12,769,146

12,934,158

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005254/en/

CONTACT: Company Contact: Eric J. Meilstrup President Chief Executive Officer LCNB National Bank (513) 932-1414 emeilstrup@lcnb.com

CONTACT: Investor and Media Contact: Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400. andrew@smberger.com