Business Wire | Jan 28, 2022 08:00AM EST

LCNB Corp. Reports Record Financial Results for the Three and Twelve Months Ended December 31, 2021

Jan. 28, 2022

LEBANON, Ohio--(BUSINESS WIRE)--Jan. 28, 2022--LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three and twelve months ended December 31, 2021.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, "LCNB reported record 2021 results, reflecting the hard work of all of our team members, the compelling financial services we provide our local communities, and the benefits of our diverse sources of revenue. Record earnings and earnings per share in 2021 were driven by sequential asset and wealth management growth combined with continued strong asset quality. In addition, I am encouraged that net loans increased by 5.4% over the past twelve months, even with the $41,271,000 reduction in Paycheck Protection Program ("PPP") loans from our portfolio during 2021. I believe our continued loan growth demonstrates positive economic activity within our markets and our ability to attract customers as a result of LCNB's experienced lenders, local presence, and customized solutions."

Mr. Meilstrup continued, "LCNB Wealth Management assets, including trust, investment, and brokerage accounts, increased 14.7% during 2021 to a record $1.06 billion. This growth led to record fiduciary income of $6,674,000, an increase of 33.2% over the prior year, and helped drive record noninterest income in 2021. LCNB Wealth Management provides us with a competitive advantage in many of our markets, and we believe there are long-term opportunities to grow our Wealth Management services to new and existing customers."

"I am proud of our strong performance in 2021, which supported $18,030,000 in record returns of capital to our shareholders. In 2021, we repurchased $8,310,000 of our common stock and returned $9,720,000 through our regular cash dividend program, an increase of 2.9% over the prior year. We believe we are well positioned to continue to grow and create value for our shareholders in 2022 and beyond. We remain focused on key strategies to diversify revenue, grow customer relationships, manage operating expenses, and prudently control risk. Our success navigating the unprecedented challenges caused by the COVID-19 pandemic over the past two years is a direct result of the dedication of all of our valued associates and our steadfast commitment to support our local communities," concluded Mr. Meilstrup.

Income Statement

Net income for the 2021 fourth quarter was $5,627,000, a 2.0% decline as compared to $5,742,000 for the same period last year. Earnings per basic and diluted share for the 2021 fourth quarter were $0.45, an increase of 2.3% as compared to $0.44 for the same period last year. Net income for the twelve-month period ended December 31, 2021, was $20,974,000, an increase of 4.5% as compared to $20,075,000 for the same period last year. Earnings per basic and diluted share for the twelve-month period ended December 31, 2021, were $1.66, an increase of 7.1% as compared to $1.55 for the same period last year.

Net interest income for the three months ended December 31, 2021, was $14,310,000, compared to $14,513,000 for the comparable period in 2020. Net interest income for the twelve-month period ended December 31, 2021, increased 1.6% to $57,124,000, as compared to $56,218,000 for 2020. Favorably contributing to the variances for both the three- and twelve-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 December 31, 2021 was 0.19%, compared to 0.33% at December 31, 2020.

Non-interest income for the three months ended December 31, 2021, increased by 1.0% to $4,347,000, compared to $4,305,000 for the same period last year. For the twelve months ended December 31, 2021, non-interest income increased by 3.1% to $16,232,000, compared to $15,741,000 for the same period last year. The primary drivers of the fourth quarter and twelve-month year-over-year changes in non-interest income were increased fiduciary income, deposit service charges, and gain from sales of debt securities, offset by reductions in gains from loan sales and lower bank owned life insurance income.

Non-interest expense for the three months ended December 31, 2021, was $367,000 greater than the comparable period in 2020. For the twelve months ended December 31, 2021, non-interest expense increased $2,255,000 from the comparable period in 2020. The increases for both the three and twelve-month periods were primarily due to increases in salaries and employee benefits, FDIC insurance, ATM expenses, contracted services, and other non-interest expenses.

Capital Allocation

LCNB invested $8,310,000 in its share repurchase program for the 2021 full year, repurchasing 493,257 shares of its outstanding stock at an average price of $16.85 per share. This equates to approximately 3.8% of the Company's December 31, 2020 outstanding shares. During the 2021 fourth quarter, LCNB invested $439,000 in its share repurchase program, repurchasing 25,185 shares of its outstanding stock at an average price of $17.45 per share. At December 31, 2021, LCNB had 21,191 shares that remained to be repurchased under its August 2020 share repurchase program.

For the full year ended December 31, 2021, LCNB paid $0.77 per share in dividends, a 5.5% increase from $0.73 per share for the full year ended December 30, 2020. On November 15, 2021, LCNB's Board of Directors approved a 5.3% increase in the Company's regular quarterly cash dividend payment from $0.19 per share to $0.20 per share. Since 1998, LCNB's regular cash dividend payment has increased at a compound annual growth rate of 3.5%.

Balance Sheet

Total assets at December 31, 2021, increased 9.0% to a record $1.90 billion from $1.75 billion at December 31, 2020. Net loans at December 31, 2021, increased 5.4% to a record $1.36 billion, compared to $1.29 billion at December 30, 2020. During 2021, LCNB helped its customers receive $41.2 million of PPP forgiveness payments, including $6.0 million during the fourth quarter of 2021. The balance of PPP loans outstanding at December 31, 2021, was $6.9 million.

Total deposits at December 31, 2021, increased 11.9% to a record $1.63 billion, compared to $1.46 billion at December 31, 2020 as LCNB continues attracting interest-bearing and non-interest-bearing accounts to the Bank.

Assets Under Management

Total assets managed at December 31, 2021 were a record $3.14 billion, compared to $2.92 billion at December 31, 2020. The 7.6% year-over-year increase in total assets managed was primarily due to strong growth across LCNB's Wealth Management group and an increase in mortgage loans serviced.

Asset Quality

For the 2021 fourth quarter, LCNB recorded a credit of $508,000 in its provision for loan losses, compared to a credit of $151,000 for the 2020 fourth quarter. For the twelve months ended December 31, 2021, LCNB recorded a credit of $269,000 in its provision for loan losses, compared to a provision of $2,014,000 for the twelve months ended December 31, 2020. The respective $357,000 and $2,283,000 improvements in the provision for loan losses for the three and twelve-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 recoveries for the 2021 fourth quarter were $186,000, compared to net charge-offs of $95,000 for the same period last year. For the 2021 twelve-month period, net recoveries were $47,000 or (0.00)% of average loans, compared to net charge-offs during 2020 of $331,000 or 0.03% of average loans.

Total nonperforming loans, which includes non-accrual loans and loans past due 90 days or more and still accruing interest decreased $2,181,000, from $3,718,000 or 0.29% of total loans at December 31, 2020, to $1,537,000 or 0.11% of total loans at December 31, 2021. Nonperforming assets to total assets was 0.08% at December 31, 2021, compared to 0.21% at December 31, 2020.

Mr. Meilstrup commented, "We are very pleased with our excellent credit trends, reflecting the strength of our local economy and our prudent underwriting. Our quarter-end ratio of nonperforming assets to total assets has not been this low over the past ten years."

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 the Southwest and South-Central Ohio regions. 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 Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended Twelve Months Ended

12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 12/31/21 12/31/20

CondensedIncome Statement

Interest $ 15,189 15,024 15,429 15,535 15,945 61,177 63,780 income

Interest 879 951 1,060 1,163 1,432 4,053 7,562 expense

Net interest 14,310 14,073 14,369 14,372 14,513 57,124 56,218 income

Provision(credit) for (508 ) 306 (15 ) (52 ) (151 ) (269 ) 2,014 loan losses

Net interestincome afterprovision 14,818 13,767 14,384 14,424 14,664 57,393 54,204 (credit) forloan losses

Non-interest 4,347 4,106 4,314 3,465 4,305 16,232 15,741 income

Non-interest 12,311 12,029 12,208 11,492 11,944 48,040 45,785 expense

Income before 6,854 5,844 6,490 6,397 7,025 25,585 24,160 income taxes

Provision for 1,227 1,027 1,200 1,157 1,283 4,611 4,085 income taxes

Net income $ 5,627 4,817 5,290 5,240 5,742 20,974 20,075

Amort/Accretincome on $ 116 132 216 249 186 713 1,328 acquired loans

Tax-equivalentnet interest $ 14,365 14,129 14,427 14,432 14,577 57,354 56,491 income



Per Share Data

Dividends per $ 0.20 0.19 0.19 0.19 0.19 0.77 0.73 share

Basic earningsper common $ 0.45 0.39 0.41 0.41 0.44 1.66 1.55 share

Dilutedearnings per $ 0.45 0.39 0.41 0.41 0.44 1.66 1.55 common share

Book value per $ 19.22 19.17 18.99 18.66 18.73 19.22 18.73 share

Tangible bookvalue per $ 14.33 14.28 14.15 13.87 13.93 14.33 13.93 share

Weighted average common shares outstanding:

Basic 12,370,702 12,455,276 12,743,726 12,794,824 12,852,614 12,589,605 12,914,277

Diluted 12,370,702 12,455,276 12,743,726 12,794,852 12,852,657 12,589,613 12,914,584

Sharesoutstanding at 12,414,956 12,434,084 12,634,845 12,820,108 12,858,325 12,414,956 12,858,325 period end



SelectedFinancial Ratios

Return on 1.18 % 1.02 % 1.15 % 1.20 % 1.31 % 1.13 % 1.18 %average assets

Return on 9.33 % 7.93 % 8.78 % 8.80 % 9.52 % 8.71 % 8.49 %average equity

Return onaverage 12.51 % 10.62 % 11.76 % 11.81 % 12.83 % 11.67 % 11.53 %tangiblecommon equity

Dividend 44.44 % 48.72 % 46.34 % 46.34 % 43.18 % 46.39 % 47.10 %payout ratio

Net interestmargin (tax 3.34 % 3.32 % 3.51 % 3.68 % 3.71 % 3.45 % 3.70 %equivalent)

Efficiencyratio (tax 65.79 % 65.96 % 65.14 % 64.21 % 63.26 % 65.28 % 63.39 %equivalent)



SelectedBalance Sheet Items

Cash and cash $ 18,136 23,852 22,909 41,144 31,730 equivalents

Debt andequity 345,649 352,066 349,199 276,774 248,624 securities



Loans:

Commercial and $ 101,792 91,246 97,240 107,630 100,254 industrial

Commercial,secured by 889,108 862,202 836,085 855,894 843,230 real estate

Residential 334,547 343,318 341,447 328,265 309,692 real estate

Consumer 34,190 35,349 35,257 35,799 36,917

Agricultural 10,647 8,852 8,765 8,698 10,100

Other,including 122 247 369 346 363 depositoverdrafts

Deferred netorigination (961 ) (1,055 ) (1,398 ) (1,531 ) (1,135 ) fees

Loans, gross 1,369,445 1,340,159 1,317,765 1,335,101 1,299,421

Less allowancefor loan 5,506 5,828 5,652 5,679 5,728 losses

Loans, net $ 1,363,939 1,334,331 1,312,113 1,329,422 1,293,693







Three Months Ended Twelve Months Ended

12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 12/31/21 12/31/20

Selected Balance Sheet Items, continued

Total earning $ 1,716,420 1,695,281 1,671,462 1,634,818 1,562,392 assets

Total assets 1,903,629 1,884,252 1,856,670 1,818,321 1,745,884

Total deposits 1,628,819 1,603,203 1,577,345 1,537,116 1,455,423

Long-term debt 10,000 15,000 15,000 17,000 22,000

Totalshareholders' 238,604 238,419 239,952 239,246 240,825 equity

Equity to 12.53 % 12.65 % 12.92 % 13.16 % 13.79 % assets ratio

Loans to 84.08 % 83.59 % 83.54 % 86.86 % 89.28 % deposits ratio



Tangiblecommon equity $ 177,949 177,501 178,771 177,805 179,127 (TCE)

Tangiblecommon assets 1,842,974 1,823,334 1,795,489 1,756,880 1,684,186 (TCA)

TCE/TCA 9.66 % 9.73 % 9.96 % 10.12 % 10.64 %



SelectedAverage Balance SheetItems

Cash and cash $ 29,614 34,557 45,414 37,269 49,273 36,648 40,825 equivalents

Debt andequity 348,150 356,214 312,596 260,147 218,816 319,619 201,012 securities



Loans $ 1,351,762 1,321,629 1,328,760 1,313,803 1,313,892 1,329,072 1,306,314

Less allowancefor loan 5,843 5,567 5,678 5,715 5,920 5,701 5,029 losses

Net loans $ 1,345,919 1,316,062 1,323,082 1,308,088 1,307,972 1,323,371 1,301,285



Total earning $ 1,708,392 1,688,589 1,666,126 1,589,582 1,561,392 1,663,567 1,528,134 assets

Total assets 1,896,530 1,879,314 1,852,035 1,775,154 1,742,947 1,851,177 1,706,924

Total deposits 1,615,020 1,595,773 1,570,070 1,488,156 1,447,217 1,567,680 1,413,093

Short-term 893 1,320 716 342 - 821 372 borrowings

Long-term debt 14,402 15,000 15,571 19,689 30,803 16,148 34,265

Totalshareholders' 239,174 240,976 241,651 241,517 239,881 240,823 236,396 equity

Equity to 12.61 % 12.82 % 13.05 % 13.61 % 13.76 % 13.01 % 13.85 %assets ratio

Loans to 83.70 % 82.82 % 84.63 % 88.28 % 90.79 % 84.78 % 92.44 %deposits ratio



Asset Quality

Netcharge-offs $ (186 ) 130 12 (3 ) 95 (47 ) 331 (recoveries)

Other real - - - - - - - estate owned



Non-accrual 1,481 2,629 3,338 3,365 3,718 1,481 3,718 loans

Loans past due90 days or 56 13 - - - 56 - more and stillaccruing

Totalnonperforming $ 1,537 2,642 3,338 3,365 3,718 1,537 3,718 loans



Netcharge-offs )(recoveries) (0.05 % 0.04 % 0.00 % 0.00 % 0.03 % 0.00 % 0.03 %to averageloans

Allowance forloan losses to 0.40 % 0.43 % 0.43 % 0.43 % 0.44 % 0.40 % 0.44 %total loans

Nonperformingloans to total 0.11 % 0.20 % 0.25 % 0.25 % 0.29 % 0.11 % 0.29 %loans

Nonperformingassets to 0.08 % 0.14 % 0.18 % 0.19 % 0.21 % 0.08 % 0.21 %total assets



Assets Under Management

LCNB Corp. $ 1,903,629 1,884,252 1,856,670 1,818,321 1,745,884 total assets

Trust andinvestments 722,093 713,936 701,838 673,742 628,414 (fair value)

Mortgage loans 149,382 140,147 126,924 127,290 137,188 serviced

Cash 34,009 72,622 80,177 118,494 116,792 management

Brokerageaccounts (fair 334,670 319,495 314,491 299,355 292,953 value)

Total assets $ 3,143,783 3,130,452 3,080,100 3,037,202 2,921,231 managed



LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)

December 31, 2021 (Unaudited)

December 31, 2020

ASSETS:

Cash and due from banks

$

16,810

17,383

Interest-bearing demand deposits

1,326

14,347

Total cash and cash equivalents

18,136

31,730

Investment securities:

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

2,546

2,389

Equity securities without a readily determinable fair value, at cost

2,099

2,099

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

308,177

209,471

Debt securities, held-to-maturity, at cost

22,972

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

1,363,939

1,293,693

Premises and equipment, net

35,385

35,376

Operating leases right of use asset

6,357

6,274

Goodwill

59,221

59,221

Core deposit and other intangibles

2,473

3,453

Bank owned life insurance

43,224

42,149

Interest receivable

7,999

8,337

Other assets

21,246

17,027

TOTAL ASSETS

$

1,903,629

1,745,884

LIABILITIES:

Deposits:

Noninterest-bearing

$

501,531

455,073

Interest-bearing

1,127,288

1,000,350

Total deposits

1,628,819

1,455,423

Long-term debt

10,000

22,000

Operating lease liabilities

6,473

6,371

Accrued interest and other liabilities

19,733

21,265

TOTAL LIABILITIES

1,665,025

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 14,213,792 and 14,163,904 shares at December 31, 2021 and 2020, respectively; outstanding 12,414,956 and 12,858,325 shares at December 31, 2021 and 2020, respectively

143,130

142,443

Retained earnings

126,312

115,058

Treasury shares at cost, 1,798,836 and 1,305,579 shares at December 31, 2021 and 2020, respectively

(29,029

)

(20,719

)

Accumulated other comprehensive income (loss), net of taxes

(1,809

)

4,043

TOTAL SHAREHOLDERS' EQUITY

238,604

240,825

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,903,629

1,745,884

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)



December 31, December 2021 31, 2020 (Unaudited)

ASSETS:

Cash and due from banks $ 16,810 17,383

Interest-bearing demand deposits 1,326 14,347

Total cash and cash equivalents 18,136 31,730

Investment securities:

Equity securities with a readily determinable fair 2,546 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 308,177 209,471

Debt securities, held-to-maturity, at cost 22,972 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 1,363,939 1,293,693

Premises and equipment, net 35,385 35,376

Operating leases right of use asset 6,357 6,274

Goodwill 59,221 59,221

Core deposit and other intangibles 2,473 3,453

Bank owned life insurance 43,224 42,149

Interest receivable 7,999 8,337

Other assets 21,246 17,027

TOTAL ASSETS $ 1,903,629 1,745,884



LIABILITIES:

Deposits:

Noninterest-bearing $ 501,531 455,073

Interest-bearing 1,127,288 1,000,350

Total deposits 1,628,819 1,455,423

Long-term debt 10,000 22,000

Operating lease liabilities 6,473 6,371

Accrued interest and other liabilities 19,733 21,265

TOTAL LIABILITIES 1,665,025 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 14,213,792 and 14,163,904 shares atDecember 31, 2021 and 2020, respectively; 143,130 142,443 outstanding 12,414,956 and 12,858,325 shares atDecember 31, 2021 and 2020, respectively

Retained earnings 126,312 115,058

Treasury shares at cost, 1,798,836 and 1,305,579 (29,029 ) (20,719 )shares at December 31, 2021 and 2020, respectively

Accumulated other comprehensive income (loss), net (1,809 ) 4,043 of taxes

TOTAL SHAREHOLDERS' EQUITY 238,604 240,825

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,903,629 1,745,884

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended December 31,

Twelve Months Ended December 31,

2021

2020

2021

2020

INTEREST INCOME:

Interest and fees on loans

$

13,770

14,839

56,142

59,267

Dividends on equity securities with a readily determinable fair value

13

14

51

54

Dividends on equity securities without a readily determinable fair value

5

4

21

37

Interest on debt securities, taxable

1,018

666

3,668

2,916

Interest on debt securities, non-taxable

208

239

864

1,027

Other investments

175

183

431

479

TOTAL INTEREST INCOME

15,189

15,945

61,177

63,780

INTEREST EXPENSE:

Interest on deposits

769

1,218

3,578

6,634

Interest on short-term borrowings

2

-

6

7

Interest on long-term debt

108

214

469

921

TOTAL INTEREST EXPENSE

879

1,432

4,053

7,562

NET INTEREST INCOME

14,310

14,513

57,124

56,218

PROVISION (CREDIT) FOR LOAN LOSSES

(508

)

(151

)

(269

)

2,014

NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES

14,818

14,664

57,393

54,204

NON-INTEREST INCOME:

Fiduciary income

1,715

1,430

6,674

5,009

Service charges and fees on deposit accounts

1,530

1,444

6,036

5,482

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

303

-

303

221

Bank owned life insurance income

269

278

1,074

1,441

Gains from sales of loans

292

861

852

2,297

Other operating income

238

292

1,293

1,291

TOTAL NON-INTEREST INCOME

4,347

4,305

16,232

15,741

NON-INTEREST EXPENSE:

Salaries and employee benefits

6,976

6,899

27,616

27,178

Equipment expenses

446

460

1,678

1,377

Occupancy expense, net

713

730

2,949

2,875

State financial institutions tax

440

428

1,758

1,708

Marketing

361

348

1,239

1,254

Amortization of intangibles

263

263

1,043

1,046

FDIC insurance premiums, net

127

114

492

256

ATM expense

436

347

1,416

1,028

Computer maintenance and supplies

332

291

1,213

1,107

Telephone expense

64

185

420

706

Contracted services

612

509

2,430

1,821

Other non-interest expense

1,541

1,370

5,786

5,429

TOTAL NON-INTEREST EXPENSE

12,311

11,944

48,040

45,785

INCOME BEFORE INCOME TAXES

6,854

7,025

25,585

24,160

PROVISION FOR INCOME TAXES

1,227

1,283

4,611

4,085

NET INCOME

$

5,627

5,742

20,974

20,075

Dividends declared per common share

$

0.20

0.19

0.77

0.73

Earnings per common share:

Basic

0.45

0.44

1.66

1.55

Diluted

0.45

0.44

1.66

1.55

Weighted average common shares outstanding:

Basic

12,370,702

12,852,614

12,589,605

12,914,277

Diluted

12,370,702

12,852,657

12,589,613

12,914,584

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127006077/en/

CONTACT: Company Contact: Eric J. Meilstrup President and Chief Executive Officer LCNB Corp. (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