Business Wire | Oct 21, 2021 08:00AM EDT

LCNB Corp. Reports Record Financial Results for the Three and Nine Months Ended September 30, 2021

Oct. 21, 2021

LEBANON, Ohio--(BUSINESS WIRE)--Oct. 21, 2021--LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three and nine months ended September 30, 2021.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, "LCNB achieved strong third quarter earnings, driven by sustained growth in LCNB Wealth assets, an increase in total earning assets, and sustained strong asset quality. Growing assets under management, actively controlling risk, and diversifying our revenue streams have positioned LCNB to effectively navigate the current low-rate environment. Fee income generated from the Paycheck Protection Program ("PPP") also contributed $492,000 to our third quarter earnings. PPP loans continue to wind down and our loan portfolio included $12,971,000 of PPP loans at September 30, 2021. We were able to help a significant number of companies get through the pandemic with PPP loans and we believe that we have strengthened and created numerous opportunities for new client relationships in the process. In addition, for the first nine months of 2021, fiduciary income grew 38.6% over the prior year period to $4,959,000."

Mr. Meilstrup continued, "Net loans at September 30, 2021 are up compared to June 30, 2021, despite an additional $10,849,000 of PPP loans forgiven during the third quarter, which reflects our unceasing commitment to a strong local presence and the value we provide customers within our compelling Ohio markets. Competition for loans remains high in the current environment, however our approach to risk and pricing of loans has been consistent, leading to strong asset quality. At September 30, 2021, non-performing loans totaled $2,642,000, a $1,562,000 or 37.2% decrease from September 30, 2020, and net charge-offs remain limited. Our prudent capital management approach supports our proactive share repurchase program. During the third quarter our board demonstrated its belief that our shares are undervalued as we repurchased 206,768 shares of our common stock. Year-to-date we have repurchased 468,072 shares at an average cost of $16.82 per share."

1Total 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 remain focused on key strategies to diversify revenue, grow customer relationships, manage operating expenses, and prudently control risk. We also continue to develop and retain proven bankers and financial professionals throughout our organization. Our markets offer attractive demographics and we believe that we are well-positioned for prolonged growth and success in the years ahead. I am thankful to our valued associates as we continue to execute on our growth strategies and I am pleased with the progress we are making," concluded Mr. Meilstrup.

Net income for the 2021 third quarter was $4,817,000, an increase of 13.3% as compared to $4,250,000 for the same period last year. Earnings per basic and diluted share for the 2021 third quarter were $0.39, an increase of 18.2% as compared to $0.33 for the same period last year. Net income for the nine-month period ended September 30, 2021, was $15,347,000, an increase of 7.1% as compared to $14,333,000 for the same period last year. Earnings per basic and diluted share for the nine-month period ended September 30, 2021, were $1.21, an increase of 9.0% as compared to $1.11 for the same period last year.

Net interest income for the three months ended September 30, 2021, was $14,073,000, compared to $13,529,000 for the comparable period in 2020. Net interest income for the nine-month period ended September 30, 2021, increased $1,109,000 to $42,814,000, as compared to $41,705,000 in the same period last year. Favorably contributing to the variances for both the three- and nine-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. LCNB's cost of funds at September 30, 2021 was 0.23%, compared to 0.48% at September 30, 2020.

Non-interest income for the three months ended September 30, 2021, declined $172,000 or by (4.0)% to $4,106,000, compared to $4,278,000 for the same period last year. For the nine months ended September 30, 2021, non-interest income increased $449,000 or by 3.9% to $11,885,000, compared to $11,436,000 for the same period last year. The primary drivers of the third quarter and nine-month year-over-year changes in non-interest income were reductions in gains from loan sales, offset by increased fiduciary income and deposit service charges.

Non-interest expense for the three months ended September 30, 2021, was $376,000 greater than the comparable period in 2020. For the nine months ended September 30, 2021, non-interest expense increased $1,888,000 from the comparable period in 2020. The increases for both the three and nine-month periods were primarily due to increases in salaries and employee benefits, equipment expenses, FDIC insurance, contracted services, and other non-interest expenses.

Asset QualityFor the 2021 third quarter, LCNB recorded a $306,000 provision for loan losses, compared to a provision of $976,000 for the 2020 third quarter. For the nine months ended September 30, 2021, LCNB recorded a provision of $239,000, compared to a provision of $2,165,000 for the nine months ended September 30, 2020. The respective $670,000 and $1,926,000 decreases in the provision for loan losses for the three and nine month periods were partially due to strong asset quality and last year's proactive build in the Company's allowance for loan losses associated with the estimated economic impacts caused by the COVID-19 pandemic.

Net charge-offs for the 2021 third quarter were $130,000, compared to $18,000 for the same period last year. For the 2021 nine-month period, net charge-offs were $139,000 or 0.01% of average loans, compared to $236,000 or 0.02% of average loans.

Non-accrual loans and loans past due 90 days or more and still accruing interest decreased $1,562,000, from $4,204,000 or 0.31% of total loans at September 30, 2020, to $2,642,000 or 0.20% of total loans at September 30, 2021. Nonperforming assets to total assets was 0.14% at September 30, 2021, compared to 0.24% at September 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 StatementsCertain 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 Nine Months Ended

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

Condensed Income Statement

Interest income $ 15,024 $ 15,429 $ 15,535 15,945 15,322 45,988 47,835

Interest expense 951 1,060 1,163 1,432 1,793 3,174 6,130

Net interest 14,073 14,369 14,372 14,513 13,529 42,814 41,705 income

Provision(credit) for 306 (15 ) (52 ) (151 ) 976 239 2,165 loan losses

Net interestincome after 13,767 14,384 14,424 14,664 12,553 42,575 39,540 provision(credit)

Non-interest 4,106 4,314 3,465 4,305 4,278 11,885 11,436 income

Non-interest 12,029 12,208 11,492 11,944 11,653 35,729 33,841 expense

Income before 5,844 6,490 6,397 7,025 5,178 18,731 17,135 income taxes

Provision for 1,027 1,200 1,157 1,283 928 3,384 2,802 income taxes

Net income $ 4,817 $ 5,290 $ 5,240 5,742 4,250 15,347 14,333

Amort/Accretincome on $ 132 $ 216 $ 249 186 181 597 1,142 acquired loans

Amort/Accretexpenses onacquired $ - $ - $ - 1 - - 5 interest-bearingliabilities

Tax-equivalentnet interest $ 14,129 $ 14,427 $ 14,432 14,577 13,594 42,988 41,914 income



Per Share Data

Dividends per $ 0.19 $ 0.19 $ 0.19 0.19 0.18 0.57 0.54 share

Basic earnings $ 0.39 $ 0.41 $ 0.41 0.44 0.33 1.21 1.11 per common share

Diluted earnings $ 0.39 $ 0.41 $ 0.41 0.44 0.33 1.21 1.11 per common share

Book value per $ 19.17 $ 18.99 $ 18.66 18.73 18.46 19.17 18.46 share

Tangible book $ 14.28 $ 14.15 $ 13.87 13.93 13.66 14.28 13.66 value per share

Weighted average common shares outstanding:

Basic 12,455,276 12,743,726 12,794,824 12,852,614 12,937,865 12,663,368 12,934,987

Diluted 12,455,276 12,743,726 12,794,852 12,852,657 12,937,901 12,663,378 12,935,388

Shares outstanding at 12,434,084 12,634,845 12,820,108 12,858,325 12,926,686 12,434,084 period end 12,926,686



Selected Financial Ratios

Return on 1.02 % 1.15 % 1.20 % 1.31 % 0.97 % 1.12 % 1.13 %average assets

Return on 7.93 % 8.78 % 8.80 % 9.52 % 7.08 % 8.50 % 8.14 %average equity

Return onaverage tangible 10.62 % 11.76 % 11.81 % 12.83 % 9.56 % 11.39 % 11.07 %common equity

Dividend payout 48.72 % 46.34 % 46.34 % 43.18 % 54.55 % 47.11 % 48.65 %ratio

Net interestmargin (tax 3.32 % 3.51 % 3.68 % 3.71 % 3.47 % 3.49 % 3.69 %equivalent)

Efficiency ratio 65.96 % 65.14 % 64.21 % 63.26 % 65.20 % 65.11 % 63.43 %(tax equivalent)



Selected Balance Sheet Items

Cash and cash $ 23,852 $ 22,909 $ 41,144 31,730 24,485 equivalents

Debt and equity 352,066 349,199 276,774 248,624 199,044 securities



Loans:

Commercial and $ 91,246 $ 97,240 $ 107,630 100,254 124,628 industrial

Commercial,secured by real 862,202 836,085 855,894 843,230 843,943 estate

Residential real 343,318 341,447 328,265 309,692 327,689 estate

Consumer 35,349 35,257 35,799 36,917 36,504

Agricultural 8,852 8,765 8,698 10,100 8,920

Other, includingdeposit 247 369 346 363 403 overdrafts

Deferred net (1,055 ) (1,398 ) (1,531 ) (1,135 ) (1,927 ) origination fees

Loans, gross 1,340,159 1,317,765 1,335,101 1,299,421 1,340,160

Less allowance 5,828 5,652 5,679 5,728 5,974 for loan losses

Loans, net $ 1,334,331 $ 1,312,113 $ 1,329,422 1,293,693 1,334,186

Three Months Ended

Nine Months Ended

9/30/2021

6/30/2021

3/31/2021

12/31/2020

9/30/2020

9/30/2021

9/30/2020

Selected Balance Sheet Items, continued

Total earning assets

$

1,695,281

$

1,671,462

$

1,634,818

1,562,392

1,547,538

Total assets

1,884,252

1,856,670

1,818,321

1,745,884

1,725,615

Total deposits

1,603,203

1,577,345

1,537,116

1,455,423

1,430,394

Short-term borrowings

-

-

-

-

-

Long-term debt

15,000

15,000

17,000

22,000

31,999

Total shareholders' equity

238,419

239,952

239,246

240,825

238,585

Equity to assets ratio

12.65

%

12.92

%

13.16

%

13.79

%

13.83

%

Loans to deposits ratio

83.59

%

83.54

%

86.86

%

89.28

%

93.69

%

Tangible common equity (TCE)

$

177,501

$

178,771

$

177,805

179,127

176,624

Tangible common assets (TCA)

1,823,334

1,795,489

1,756,880

1,684,186

1,663,654

TCE/TCA

9.73

%

9.96

%

10.12

%

10.64

%

10.62

%

Selected Average Balance Sheet Items

Cash and cash equivalents

$

34,557

$

45,414

$

37,269

49,273

42,661

39,021

37,988

Debt and equity securities

356,214

312,596

260,147

218,816

197,788

310,004

195,033

Loans

$

1,321,629

$

1,328,760

$

1,313,803

1,313,892

1,339,608

1,321,426

1,303,770

Less allowance for loan losses

5,567

5,678

5,715

5,920

5,250

5,653

4,730

Net loans

$

1,316,062

$

1,323,082

$

1,308,088

1,307,972

1,334,358

1,315,773

1,299,040

Total earning assets

$

1,688,589

$

1,666,126

$

1,589,582

1,561,392

1,558,886

1,648,461

1,516,967

Total assets

1,879,314

1,852,035

1,775,154

1,742,947

1,741,998

1,835,887

1,695,103

Total deposits

1,595,773

1,570,070

1,488,156

1,447,217

1,445,573

1,551,727

1,401,636

Short-term borrowings

1,320

716

342

-

-

796

497

Long-term debt

15,000

15,571

19,689

30,803

33,020

16,736

35,427

Total shareholders' equity

240,976

241,651

241,517

239,881

238,990

241,379

235,225

Equity to assets ratio

12.82

%

13.05

%

13.61

%

13.76

%

13.72

%

13.15

%

13.88

%

Loans to deposits ratio

82.82

%

84.63

%

88.28

%

90.79

%

92.67

%

85.16

%

93.02

%

Asset Quality

Net charge-offs (recoveries)

$

130

$

12

$

(3

)

95

18

139

236

Other real estate owned

-

-

-

-

-

-

-

Non-accrual loans

2,629

3,338

3,365

3,718

4,110

2,629

4,110

Loans past due 90 days or more and still accruing

13

-

-

-

94

13

94

Total nonperforming loans

$

2,642

$

3,338

$

3,365

3,718

4,204

2,642

4,204

Net charge-offs to average loans

0.04

%

0.00

%

0.00

%

0.03

%

0.01

%

0.01

%

0.02

%

Allowance for loan losses to total loans

0.43

%

0.43

%

0.43

%

0.44

%

0.45

%

0.43

%

0.45

%

Nonperforming loans to total loans

0.20

%

0.25

%

0.25

%

0.29

%

0.31

%

0.20

%

0.31

%

Nonperforming assets to total assets

0.14

%

0.18

%

0.19

%

0.21

%

0.24

%

0.14

%

0.24

%

Assets Under Management

LCNB Corp. total assets

$

1,884,252

$

1,856,670

$

1,818,321

1,745,884

1,725,615

Trust and investments (fair value)

713,936

701,838

673,742

628,414

524,502

Mortgage loans serviced

140,147

126,924

127,290

137,188

120,546

Cash management

72,622

80,177

118,494

116,792

119,520

Brokerage accounts (fair value)

319,495

314,491

299,355

292,953

267,307

Total assets managed

$

3,130,452

$

3,080,100

3,037,202

2,921,231

2,757,490

Three Months Ended Nine Months Ended

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

SelectedBalance Sheet Items, continued

Total earning $ 1,695,281 $ 1,671,462 $ 1,634,818 1,562,392 1,547,538 assets

Total assets 1,884,252 1,856,670 1,818,321 1,745,884 1,725,615

Total 1,603,203 1,577,345 1,537,116 1,455,423 1,430,394 deposits

Short-term - - - - - borrowings

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

Totalshareholders' 238,419 239,952 239,246 240,825 238,585 equity

Equity to 12.65 % 12.92 % 13.16 % 13.79 % 13.83 % assets ratio

Loans todeposits 83.59 % 83.54 % 86.86 % 89.28 % 93.69 % ratio



Tangiblecommon equity $ 177,501 $ 178,771 $ 177,805 179,127 176,624 (TCE)

Tangiblecommon assets 1,823,334 1,795,489 1,756,880 1,684,186 1,663,654 (TCA)

TCE/TCA 9.73 % 9.96 % 10.12 % 10.64 % 10.62 %



SelectedAverage Balance SheetItems

Cash and cash $ 34,557 $ 45,414 $ 37,269 49,273 42,661 39,021 37,988 equivalents

Debt andequity 356,214 312,596 260,147 218,816 197,788 310,004 195,033 securities



Loans $ 1,321,629 $ 1,328,760 $ 1,313,803 1,313,892 1,339,608 1,321,426 1,303,770

Lessallowance for 5,567 5,678 5,715 5,920 5,250 5,653 4,730 loan losses

Net loans $ 1,316,062 $ 1,323,082 $ 1,308,088 1,307,972 1,334,358 1,315,773 1,299,040



Total earning $ 1,688,589 $ 1,666,126 $ 1,589,582 1,561,392 1,558,886 1,648,461 1,516,967 assets

Total assets 1,879,314 1,852,035 1,775,154 1,742,947 1,741,998 1,835,887 1,695,103

Total 1,595,773 1,570,070 1,488,156 1,447,217 1,445,573 1,551,727 1,401,636 deposits

Short-term 1,320 716 342 - - 796 497 borrowings

Long-term 15,000 15,571 19,689 30,803 33,020 16,736 35,427 debt

Totalshareholders' 240,976 241,651 241,517 239,881 238,990 241,379 235,225 equity

Equity to 12.82 % 13.05 % 13.61 % 13.76 % 13.72 % 13.15 % 13.88 %assets ratio

Loans todeposits 82.82 % 84.63 % 88.28 % 90.79 % 92.67 % 85.16 % 93.02 %ratio



Asset Quality

Netcharge-offs $ 130 $ 12 $ (3 ) 95 18 139 236 (recoveries)

Other real - - - - - - - estate owned



Non-accrual 2,629 3,338 3,365 3,718 4,110 2,629 4,110 loans

Loans pastdue 90 daysor more and 13 - - - 94 13 94 stillaccruing

Totalnonperforming $ 2,642 $ 3,338 $ 3,365 3,718 4,204 2,642 4,204 loans



Netcharge-offs 0.04 % 0.00 % 0.00 % 0.03 % 0.01 % 0.01 % 0.02 %to averageloans

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

Nonperformingloans to 0.20 % 0.25 % 0.25 % 0.29 % 0.31 % 0.20 % 0.31 %total loans

Nonperformingassets to 0.14 % 0.18 % 0.19 % 0.21 % 0.24 % 0.14 % 0.24 %total assets



Assets Under Management

LCNB Corp. $ 1,884,252 $ 1,856,670 $ 1,818,321 1,745,884 1,725,615 total assets

Trust andinvestments 713,936 701,838 673,742 628,414 524,502 (fair value)

Mortgageloans 140,147 126,924 127,290 137,188 120,546 serviced

Cash 72,622 80,177 118,494 116,792 119,520 management

Brokerageaccounts 319,495 314,491 299,355 292,953 267,307 (fair value)

Total assets $ 3,130,452 $ 3,080,100 3,037,202 2,921,231 2,757,490 managed

LCNB CORP. AND SUBSIDIARIESCONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

September 30,

2021

(Unaudited)

December 31,

2020

ASSETS:

Cash and due from banks

$

20,796

17,383

Interest-bearing demand deposits

3,056

14,347

Total cash and cash equivalents

23,852

31,730

Investment securities:

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

2,478

2,389

Equity securities without a readily determinable fair value, at cost

2,099

2,099

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

313,214

209,471

Debt securities, held-to-maturity, at cost

24,420

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

1,334,331

1,293,693

Premises and equipment, net

35,154

35,376

Operating leases right of use asset

6,608

6,274

Goodwill

59,221

59,221

Core deposit and other intangibles

2,671

3,453

Bank owned life insurance

42,954

42,149

Interest receivable

8,624

8,337

Other assets

18,771

17,027

TOTAL ASSETS

$

1,884,252

1,745,884

LIABILITIES:

Deposits:

Noninterest-bearing

$

483,920

455,073

Interest-bearing

1,119,283

1,000,350

Total deposits

1,603,203

1,455,423

Long-term debt

15,000

22,000

Operating lease liabilities

6,693

6,371

Accrued interest and other liabilities

20,937

21,265

TOTAL LIABILITIES

1,645,833

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 14,207,735 and 14,163,904 shares at September 30, 2021 and December 31, 2020, respectively; outstanding 12,434,084 and 12,858,325 shares at September 30, 2021 and December 31, 2020, respectively

142,946

142,443

Retained earnings

123,167

115,058

Treasury shares at cost, 1,773,651 and 1,305,579 shares at September 30, 2021 and December 31, 2020, respectively

(28,590

)

(20,719

)

Accumulated other comprehensive income, net of taxes

896

4,043

TOTAL SHAREHOLDERS' EQUITY

238,419

240,825

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,884,252

1,745,884

LCNB CORP. AND SUBSIDIARIESCONSOLIDATED CONDENSED BALANCE SHEETS



(Dollars in thousands)



September 30, December 31, 2021 2020 (Unaudited)

ASSETS:

Cash and due from banks $ 20,796 17,383

Interest-bearing demand deposits 3,056 14,347

Total cash and cash equivalents 23,852 31,730

Investment securities:

Equity securities with a readily determinable fair 2,478 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 313,214 209,471

Debt securities, held-to-maturity, at cost 24,420 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 1,334,331 1,293,693

Premises and equipment, net 35,154 35,376

Operating leases right of use asset 6,608 6,274

Goodwill 59,221 59,221

Core deposit and other intangibles 2,671 3,453

Bank owned life insurance 42,954 42,149

Interest receivable 8,624 8,337

Other assets 18,771 17,027

TOTAL ASSETS $ 1,884,252 1,745,884



LIABILITIES:

Deposits:

Noninterest-bearing $ 483,920 455,073

Interest-bearing 1,119,283 1,000,350

Total deposits 1,603,203 1,455,423

Long-term debt 15,000 22,000

Operating lease liabilities 6,693 6,371

Accrued interest and other liabilities 20,937 21,265

TOTAL LIABILITIES 1,645,833 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 14,207,735 and 14,163,904 shares atSeptember 30, 2021 and December 31, 2020, 142,946 142,443 respectively; outstanding 12,434,084 and 12,858,325shares at September 30, 2021 and December 31, 2020,respectively

Retained earnings 123,167 115,058

Treasury shares at cost, 1,773,651 and 1,305,579shares at September 30, 2021 and December 31, 2020, (28,590 ) (20,719 )respectively

Accumulated other comprehensive income, net of 896 4,043 taxes

TOTAL SHAREHOLDERS' EQUITY 238,419 240,825

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,884,252 1,745,884

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

2021

2020

2021

2020

INTEREST INCOME:

Interest and fees on loans

$

13,729

14,379

42,372

44,428

Dividends on equity securities with a readily determinable fair value

12

13

38

40

Dividends on equity securities without a readily determinable fair value

5

5

16

33

Interest on debt securities, taxable

1,027

633

2,650

2,250

Interest on debt securities, non-taxable

214

249

656

788

Other investments

37

43

256

296

TOTAL INTEREST INCOME

15,024

15,322

45,988

47,835

INTEREST EXPENSE:

Interest on deposits

836

1,567

2,809

5,416

Interest on short-term borrowings

2

-

4

7

Interest on long-term debt

113

226

361

707

TOTAL INTEREST EXPENSE

951

1,793

3,174

6,130

NET INTEREST INCOME

14,073

13,529

42,814

41,705

PROVISION FOR LOAN LOSSES

306

976

239

2,165

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

13,767

12,553

42,575

39,540

NON-INTEREST INCOME:

Fiduciary income

1,695

1,275

4,959

3,579

Service charges and fees on deposit accounts

1,621

1,506

4,506

4,038

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

-

-

-

221

Bank owned life insurance income

269

275

805

1,163

Gains from sales of loans

366

999

560

1,436

Other operating income

155

223

1,055

999

TOTAL NON-INTEREST INCOME

4,106

4,278

11,885

11,436

NON-INTEREST EXPENSE:

Salaries and employee benefits

7,096

6,863

20,640

20,279

Equipment expenses

421

341

1,232

917

Occupancy expense, net

713

740

2,236

2,145

State financial institutions tax

437

424

1,318

1,280

Marketing

253

471

878

906

Amortization of intangibles

263

263

780

783

FDIC insurance premiums, net

129

112

365

142

Contracted services

655

435

1,818

1,312

Other non-interest expense

2,062

2,004

6,462

6,077

TOTAL NON-INTEREST EXPENSE

12,029

11,653

35,729

33,841

INCOME BEFORE INCOME TAXES

5,844

5,178

18,731

17,135

PROVISION FOR INCOME TAXES

1,027

928

3,384

2,802

NET INCOME

$

4,817

4,250

15,347

14,333

Dividends declared per common share

$

0.19

0.18

0.57

0.54

Earnings per common share:

Basic

0.39

0.33

1.21

1.11

Diluted

0.39

0.33

1.21

1.11

Weighted average common shares outstanding:

Basic

12,455,276

12,937,865

12,663,368

12,934,987

Diluted

12,455,276

12,937,901

12,663,378

12,935,388

View source version on businesswire.com: https://www.businesswire.com/news/home/20211021005195/en/

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

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