LCNB Corp. Reports Financial Results for the Three and Twelve Months Ended December 31, 2023
LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced financial results for the three and twelve months ended December 31, 2023.
Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, “I am pleased with the progress we made in 2023 executing our multi-year strategic growth plan, maintaining excellent asset quality, and returning additional capital back to our shareholders through our higher annual dividend, despite a challenging operating environment and restrictive Federal Reserve monetary policies. In November 2023, we successfully closed the Cincinnati Bancorp, Inc. (“Cincinnati Federal”) acquisition and announced the acquisition of Eagle Financial Bancorp, Inc. (“EFBI” or “Eagle”), the holding company for EAGLE.bank, which we expect to close during the 2024 second quarter. Upon completion of the EFBI transaction, LCNB will have 25 branches and $1.4 billion in deposits within the Cincinnati MSA, adding to LCNB’s position as one of the largest community banks in Southwest Ohio.
Mr. Meilstrup continued, “As expected, fourth-quarter profitability was impacted by one-time expenses associated with the Cincinnati Federal and EFBI acquisitions. While we expect one-time merger-related expenses will continue throughout the first half of 2024, we believe we are well positioned for earnings growth to reaccelerate in the fourth quarter of 2024. In addition, I am pleased with the core growth we experienced in 2023, as total assets, net loans, and total deposits all grew organically. This growth is a direct result of the efforts of our team members, our local presence in compelling Ohio and Kentucky markets, and the tremendous value we provide our communities. We also continued to see strong LCNB Wealth Management growth, which helped support record annual noninterest income in 2023. As we look to 2024, we believe it to be a year of continued investment and transformation that we expect will create the necessary platform to drive significant value for our shareholders in 2025 and beyond.”
Income Statement
For the 2023 fourth quarter, LCNB reported a net loss of $293,000, compared to net income of $6,408,000 for the same period last year. The Company reported a net loss per basic and diluted share for the 2023 fourth quarter of $0.02, compared to net income of $0.57 per basic and diluted share for the same period last year. Net income for the twelve-month period ended December 31, 2023, was $12,628,000, compared to $22,128,000 for the same period last year. Earnings per basic and diluted share for the twelve-month period ended December 31, 2023, were $1.10, compared to $1.93 for the same period last year.
Adjusted net income accounts for the impact of one-time merger-related expenses, net of tax, associated with the Cincinnati Federal and EFBI acquisitions. Adjusted net income for the 2023 fourth quarter was $4,241,000, or $0.34 per diluted share, compared to $6,408,000, or $0.57 per diluted share, for the same period last year. Adjusted net income for the twelve-month period ended December 31, 2023, was $17,834,000, or $1.56 per diluted share, compared to $22,128,000, or $1.93 per diluted share, in the prior year period.
Pre-tax, pre-provision net income, adjusted for one-time acquisition related expense, was $5,603,000 for the three months ended December 31, 2023, compared to $7,772,000 for the comparable period in 2022. For the twelve-month period ended December 31, 2023, pre-tax, pre-provision net income, adjusted for one-time acquisition related expense, was $21,993,000, compared to $27,196,000 for the same period a year ago.
Net interest income for the three months ended December 31, 2023, was $14,659,000, compared to $16,208,000 for the comparable period in 2022. Net interest income for the twelve-month period ended December 31, 2023, was $56,349,000, as compared to $61,042,000 in the same period last year. Contributing to the variances for both the three and twelve-month periods were increases in the amount of long and short-term borrowings combined with higher interest expense associated with the rapid year-over-year increase in the Effective Federal Funds Rate. An increase in interest income from loans due to increases in the volume of average loans outstanding and the average rates earned on these loans partially offset the borrowings and deposit interest expense-related variances. For the 2023 fourth quarter, LCNB’s tax equivalent net interest margin was 2.99%, compared to 3.77% for the same period last year. For the 2023 twelve-month period, LCNB’s tax equivalent net interest margin was 3.14%, compared to 3.55% for the same period last year.
Non-interest income for the three months ended December 31, 2023, was $4,606,000, compared to $3,629,000 for the same period last year. For the twelve months ended December 31, 2023, non-interest income increased $1,123,000, or by 7.9%, to $15,411,000, compared to $14,288,000 for the same period last year. The increase in non-interest income for the twelve-month period was primarily due to higher fiduciary income, a decrease in net losses recognized on equity securities, and higher gains on sales of loans, partially offset by decreased service charges and fees on deposit accounts.
Non-interest expense for the three months ended December 31, 2023, was $5,511,000 higher than the comparable period in 2022, primarily due to higher personnel and operating expenses primarily associated the integration of Cincinnati Federal and $3,914,000 of one-time expenses associated with the Cincinnati Federal and EFBI acquisitions. For the twelve months ended December 31, 2023, non-interest expense was $6,289,000 higher than the comparable period in 2022, partially due to $4,656,000 in acquisition-related expenses, and higher personnel and operating expenses primarily associated the integration of Cincinnati Federal. In addition, non-interest expense for the 2022 twelve-month period included $471,000 in losses from the sales of two office buildings as a result of the Company’s branch consolidation strategy, which was offset by an $889,000 gain from the sale of other real estate owned recognized during the 2022 second quarter.
Capital Allocation
During the twelve months ended December 31, 2023, 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 December 31, 2023, LCNB had 315,047 shares remaining under its February 2023 share repurchase program.
For the full year ended December 31, 2023, LCNB paid $0.85 per share in dividends, a 4.9% increase from $0.81 per share for the full year ended December 31, 2022. On November 20, 2023, LCNB’s Board of Directors approved a 4.8% increase in the Company’s regular quarterly cash dividend payment from $0.21 per share to $0.22 per share. LCNB’s regular cash dividend payment has increased 32.8% from $0.64 per share in 2017 to $0.85 per share in 2023.
Balance Sheet
Total assets at December 31, 2023 increased 19.4% to a record $2.29 billion from $1.92 billion at December 31, 2022. Net loans at December 31, 2023, increased 22.7% to a record $1.71 billion, compared to $1.40 billion at December 31, 2022. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Cincinnati Federal acquisition. Not including the Cincinnati Federal acquisition, total net loans increased 5.8% organically, or by $80.6 million from the same period a year ago.
Total deposits at December 31, 2023, increased 13.7% to $1.82 billion, compared to $1.60 billion at December 31, 2022. Not including the Cincinnati Federal acquisition, total deposits increased 0.6% organically, or by $8.9 million from December 31, 2022.
Assets Under Management
Total assets managed at December 31, 2023 were a record $3.88 billion, compared to $3.10 billion at December 31, 2022. The year-over-year increase in total assets managed was primarily due to the Cincinnati Federal acquisition, and organic growth in LCNB Corp. total assets, trust and investments, and brokerage accounts. Organically, trust and investments and brokerage accounts increased due to a higher number of new LCNB Wealth Management customer accounts opened during 2023 and an increase in the fair value of managed assets. Mortgage loans serviced increased primarily due to the Cincinnati Federal acquisition.
Asset Quality
For the 2023 fourth quarter, LCNB recorded a provision for credit losses of $2.2 million, compared to a total net recovery of credit losses of $19,000 for the 2022 fourth quarter. For the twelve months ended December 31, 2023, LCNB recorded a provision for credit losses of $2.1 million, compared to $250,000 for the twelve months ended December 31, 2022. Included in the provision for credit losses for the three and twelve months ended December 31, 2023 was a $1.7 million provision expense related to loans acquired through the Cincinnati Federal acquisition that were not considered purchased with credit deterioration ("non-PCD loans").
Net charge-offs for the 2023 fourth quarter were $102,000, or 0.02% of average loans, compared to net recoveries of $21,000, or 0.01% of average loans, for the same period last year. For the 2023 twelve-month period, net charge-offs were $184,000, or 0.01% of average loans, compared to net charge-offs of $110,000, or 0.01% of average loans, for the 2022 twelve-month period.
Total nonperforming loans, which include non-accrual loans and loans past due 90 days or more and still accruing interest, decreased $278,000 from $430,000 or 0.03% of total loans at December 31, 2022, to $152,000 or 0.01% of total loans at December 31, 2023. The nonperforming assets to total assets ratio was 0.01% at December 31, 2023, compared to 0.02% at December 31, 2022.
Merger Agreement with Eagle Financial Bancorp, Inc.
LCNB and EFBI (OTCQB: EFBI) signed a definitive merger agreement on November 29, 2023, whereby LCNB will acquire EFBI in a stock-and-cash transaction. EAGLE.bank operates three full-service banking offices in Cincinnati, Ohio.
Pursuant to the terms of the merger agreement, which has been approved by the Board of Directors of each company, EFBI shareholders will have the opportunity to elect to receive either 1.1401 shares of LCNB stock or $19.10 per share in cash for each share of EFBI common stock owned, subject to at least 60%, but not more than 70% of the shares of EFBI being exchanged for LCNB common stock. The transaction is anticipated to close during the second quarter of 2024. Closure is subject to customary closing conditions as described in the merger agreement, including receipt of certain regulatory approvals.
About LCNB Corp.
LCNB Corp. is a financial holding company headquartered in Lebanon, Ohio. Through its subsidiary, LCNB National Bank (the “Bank”), it serves customers and communities in Southwest and South-Central Ohio and Northern Kentucky. A financial institution with a long tradition for building strong relationships with customers and communities, the Bank offers convenient banking locations in Butler, Clermont, Clinton, Fayette, Franklin, Hamilton, Montgomery, Preble, Ross, and Warren Counties, Ohio. The Bank also provides community-oriented banking services to customers in Northern Kentucky through a bank office in Boone County, Kentucky. The Bank continually strives to exceed customer expectations and provides an array of services for all personal and business banking needs including checking, savings, online banking, personal lending, business lending, agricultural lending, business support, deposit and treasury, investment services, trust and IRAs and stock purchases. LCNB Corp. common shares are traded on the NASDAQ Capital Market Exchange® under the symbol “LCNB.” Learn more about LCNB Corp. at www.lcnb.com.
Forward-Looking Statements
Certain statements made in this news release regarding LCNB’s financial condition, results of operations, plans, objectives, future performance and business, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by the fact they are not historical facts and include words such as “anticipate”, “could”, “may”, “feel”, “expect”, “believe”, “plan”, and similar expressions. Please refer to LCNB’s Annual Report on Form 10-K for the year ended December 31, 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:
the success, impact, and timing of the implementation of LCNB’s business strategies; 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 and the allowance for credit losses may be inadequate; LCNB may face competitive loss of customers; 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; 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; global geopolitical relations and/or conflicts could create financial market uncertainty and have negative impacts on commodities and currency, which could adversely affect LCNB's operating results and financial condition; 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; 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 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, the Tax Cuts and Jobs Act, changes in deposit insurance premium levels, and any such future regulatory actions or reforms.Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist shareholders and potential investors in understanding current and anticipated financial operations of LCNB and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. LCNB undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made.
LCNB Corp. and Subsidiaries
Financial Highlights
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
Twelve Months Ended
12-31-2023
09-30-2023
06-30-2023
03-31-2023
12-31-2022
12-31-2023
12-31-2022
Condensed Income Statement
Interest income
$
23,310
19,668
18,703
17,918
17,719
79,599
65,753
Interest expense
8,651
6,097
4,526
3,976
1,511
23,250
4,711
Net interest income
14,659
13,571
14,177
13,942
16,208
56,349
61,042
Provision for (recovery of) credit losses
2,218
(114
)
30
(57
)
(19
)
2,077
250
Net interest income after provision for (recovery of) credit losses
12,441
13,685
14,147
13,999
16,227
54,272
60,792
Non-interest income
4,606
3,578
3,646
3,581
3,629
15,411
14,288
Non-interest expense
17,576
12,244
12,078
12,525
12,065
54,423
48,134
Income before Income taxes
(529
)
5,019
5,715
5,055
7,791
15,260
26,946
Provision for (benefit from) income taxes
(236
)
949
1,021
898
1,383
2,632
4,818
Net income (loss)
$
(293
)
$
4,070
$
4,694
$
4,157
6,408
12,628
22,128
Supplemental Income Statement Information
Amort/Accret income on acquired loans
$
410
—
—
75
249
484
520
Tax-equivalent net interest income
$
14,703
13,617
14,223
13,989
16,257
56,532
61,242
Per Share Data
Dividends per share
$
0.22
0.21
0.21
0.21
0.21
0.85
0.81
Basic earnings (loss) per common share
$
(0.02
)
0.37
0.42
0.37
0.57
1.10
1.93
Diluted earnings (loss) per common share
$
(0.02
)
0.37
0.42
0.37
0.57
1.10
1.93
Book value per share
$
17.86
18.10
18.20
18.22
17.82
17.86
17.82
Tangible book value per share
$
11.16
12.72
12.81
12.86
12.48
11.16
12.48
Weighted average common shares outstanding:
Basic
12,378,289
11,038,720
11,056,308
11,189,170
11,211,328
11,417,857
11,410,981
Diluted
12,378,289
11,038,720
11,056,308
11,189,170
11,211,328
11,417,857
11,410,981
Shares outstanding at period end
13,173,569
11,123,382
11,116,080
11,202,063
11,259,080
13,173,569
11,259,080
Selected Financial Ratios
Return on average assets
(0.05
)%
0.82
%
0.98
%
0.88
%
1.34
%
0.63
%
1.16
%
Return on average equity
(0.53
)%
7.92
%
9.22
%
8.33
%
12.90
%
6.08
%
10.62
%
Return on average tangible common equity
(0.72
)%
11.21
%
13.07
%
11.85
%
18.59
%
8.54
%
14.96
%
Dividend payout ratio
NM
56.76
%
50.00
%
56.76
%
36.84
%
77.27
%
41.97
%
Net interest margin (tax equivalent)
2.99
%
3.04
%
3.28
%
3.28
%
3.77
%
3.14
%
3.55
%
Efficiency ratio (tax equivalent)
91.02
%
71.21
%
67.59
%
71.29
%
60.67
%
75.65
%
63.73
%
Selected Balance Sheet Items
Cash and cash equivalents
$
39,723
43,422
26,020
31,876
22,701
Debt and equity securities
318,723
309,094
314,763
328,194
323,167
Loans:
Commercial and industrial
$
120,411
125,751
127,553
124,240
120,236
Commercial, secured by real estate
1,107,556
981,787
961,173
932,208
938,022
Residential real estate
459,073
313,286
312,338
303,051
305,575
Consumer
25,578
27,018
29,007
28,611
28,290
Agricultural
10,952
11,278
9,955
7,523
10,054
Other, including deposit overdrafts
82
80
69
62
81
Deferred net origination fees
(181
)
(796
)
(844
)
(865
)
(980
)
Loans, gross
1,723,471
1,458,404
1,439,251
1,394,830
1,401,278
Less allowance for credit losses on loans
10,525
7,932
7,956
7,858
5,646
Loans, net
$
1,712,946
1,450,472
1,431,295
1,386,972
1,395,632
"NM" - Not Meaningful
Three Months Ended
Twelve Months Ended
12-31-2023
09-30-2023
06-30-2023
03-31-2023
12-31-2022
12-31-2023
12-31-2022
Selected Balance Sheet Items, continued
Allowance for Credit Losses on Loans:
Allowance for credit losses, beginning of period
$
7,932
7,956
7,858
5,646
5,644
Cumulative change in accounting principle - ASC 326
—
—
—
2,196
—
Fair value adjustment for purchased credit deteriorated loans
493
—
—
—
—
Provision for (recovery of) credit losses
2,203
9
131
32
(19
)
Losses charged off
(126
)
(57
)
(49
)
(36
)
(60
)
Recoveries
23
24
16
20
81
Allowance for credit losses, end of period
$
10,525
7,932
7,956
7,858
5,646
Total earning assets
$
2,045,382
1,787,796
1,756,157
1,736,829
$
1,726,902
Total assets
2,291,592
1,981,668
1,950,763
1,924,808
1,919,398
Total deposits
1,824,389
1,616,890
1,596,709
1,603,881
1,604,970
Short-term borrowings
97,395
30,000
112,289
76,500
71,455
Long-term debt
113,123
112,641
18,122
18,598
19,072
Total shareholders’ equity
235,303
201,349
202,316
204,072
200,675
Equity to assets ratio
10.27
%
10.16
%
10.37
%
10.60
%
10.46
%
Loans to deposits ratio
94.47
%
90.20
%
90.14
%
86.97
%
87.31
%
Tangible common equity (TCE)
$
146,999
141,508
142,362
144,006
140,489
Tangible common assets (TCA)
2,203,288
1,921,827
1,890,809
1,864,742
1,859,212
TCE/TCA
6.67
%
7.36
%
7.53
%
7.72
%
7.56
%
Selected Average Balance Sheet Items
Cash and cash equivalents
$
49,436
36,177
30,742
35,712
24,330
38,040
30,364
Debt and equity securities
310,274
313,669
321,537
327,123
323,195
318,082
335,051
Loans
$
1,622,911
1,451,153
1,405,939
1,389,385
1,383,809
1,467,981
1,380,272
Less allowance for credit losses on loans
8,826
7,958
7,860
7,522
5,647
8,046
5,629
Net loans
$
1,614,085
1,443,195
1,398,079
1,381,863
1,378,162
1,459,935
1,374,643
Total earning assets
$
1,952,121
1,775,713
1,737,256
1,729,008
1,711,524
1,799,102
1,724,350
Total assets
2,182,477
1,971,269
1,927,956
1,922,031
1,903,624
2,001,565
1,915,716
Total deposits
1,759,677
1,610,508
1,604,346
1,583,857
1,637,201
1,640,000
1,652,309
Short-term borrowings
64,899
63,018
79,485
94,591
21,433
75,383
14,482
Long-term debt
115,907
72,550
18,514
18,983
23,855
56,798
17,910
Total shareholders’ equity
220,678
203,967
204,085
202,419
197,014
207,827
208,271
Equity to assets ratio
10.11
%
10.35
%
10.59
%
10.53
%
10.35
%
10.38
%
10.87
%
Loans to deposits ratio
92.23
%
90.11
%
87.63
%
87.72
%
84.52
%
89.51
%
83.54
%
Asset Quality
Net charge-offs (recoveries)
$
102
33
33
16
(21
)
184
110
Other real estate owned
—
—
—
—
—
—
—
Non-accrual loans
$
80
85
451
701
391
80
391
Loans past due 90 days or more and still accruing
72
176
256
—
39
72
39
Total nonperforming loans
$
152
261
707
701
430
152
430
Net charge-offs (recoveries) to average loans
0.02
%
0.01
%
0.01
%
0.00
%
(0.01
)%
0.01
%
0.01
%
Allowance for credit losses on loans to total loans
0.61
%
0.54
%
0.55
%
0.56
%
0.40
%
Nonperforming loans to total loans
0.01
%
0.02
%
0.05
%
0.05
%
0.03
%
Nonperforming assets to total assets
0.01
%
0.01
%
0.04
%
0.04
%
0.02
%
Three Months Ended
Twelve Months Ended
12-31-2023
09-30-2023
06-30-2023
03-31-2023
12-31-2022
12-31-2023
12-31-2022
Assets Under Management
LCNB Corp. total assets
$
2,291,592
1,981,668
1,950,763
1,924,808
1,919,398
Trust and investments (fair value)
806,770
731,342
744,149
716,578
678,366
Mortgage loans serviced
391,800
146,483
143,093
142,167
148,412
Cash management
2,375
2,445
2,668
1,831
1,925
Brokerage accounts (fair value)
392,390
368,854
384,889
374,066
347,737
Total assets managed
$
3,884,927
3,230,792
3,225,562
3,159,450
3,095,838
Reconciliation of Net Income Less Tax-Effected Merger-Related Costs
Net income (loss)
$
(293
)
4,070
4,694
4,157
6,408
12,628
22,128
Merger expenses
3,914
302
415
25
—
4,656
—
Provision for credit losses on non-PCD loans
1,722
—
—
—
—
1,722
—
Tax effect
(1,102
)
(3
)
(63
)
(4
)
—
(1,172
)
—
Adjusted net income
$
4,241
4,369
5,046
4,178
6,408
17,834
22,128
Adjusted basic and diluted earnings per share
$
0.34
0.40
0.45
0.37
0.57
1.56
1.93
Adjusted return on average assets
0.77
%
0.88
%
1.05
%
0.88
%
1.34
%
0.89
%
1.16
%
Adjusted return on average equity
7.62
%
8.50
%
9.92
%
8.37
%
12.90
%
8.58
%
10.62
%
Three Months Ended December 31,
Three Months Ended September 30,
2023
2022
2023
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Rate
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Rate
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Rate
Loans (1)
$
1,622,911
21,113
5.16
%
$
1,383,809
15,887
4.55
%
$
1,451,153
17,875
4.89
%
Interest-bearing demand deposits
18,936
280
5.87
%
4,520
56
4.92
%
10,891
152
5.54
%
Federal Reserve Bank stock
4,930
144
11.59
%
4,652
140
11.94
%
4,652
—
—
%
Federal Home Loan Bank stock
12,607
273
8.59
%
4,106
66
6.38
%
7,007
134
7.59
%
Investment securities:
Equity securities
4,415
62
5.57
%
4,353
29
2.64
%
3,382
38
4.46
%
Debt securities, taxable
265,736
1,273
1.90
%
283,442
1,355
1.90
%
274,494
1,296
1.87
%
Debt securities, non-taxable (2)
22,586
209
3.67
%
26,642
235
3.50
%
24,134
219
3.60
%
Total earnings assets
1,952,121
23,354
4.75
%
1,711,524
17,768
4.12
%
1,775,713
19,714
4.40
%
Non-earning assets
239,182
197,747
203,514
Allowance for credit losses
(8,826
)
(5,647
)
(7,958
)
Total assets
$
2,182,477
$
1,903,624
$
1,971,269
Interest-bearing demand and money market deposits
$
574,349
2,710
1.87
%
$
520,158
610
0.47
%
$
541,487
2,298
1.68
%
Savings deposits
402,791
323
0.32
%
444,632
153
0.14
%
379,515
129
0.13
%
IRA and time certificates
302,434
3,321
4.36
%
150,175
426
1.13
%
230,030
1,999
3.45
%
Short-term borrowings
64,899
918
5.61
%
21,433
96
1.78
%
63,018
830
5.23
%
Long-term debt
115,907
1,379
4.72
%
23,855
226
3.76
%
72,550
841
4.60
%
Total interest-bearing liabilities
1,460,380
8,651
2.35
%
1,160,253
1,511
0.52
%
1,286,600
6,097
1.88
%
Demand deposits
480,103
522,236
459,476
Other liabilities
21,316
24,121
21,226
220,678
197,014
203,967
Total liabilities and equity
$
2,182,477
$
1,903,624
$
1,971,269
Net interest rate spread (3)
2.40
%
3.60
%
2.52
%
Net interest income and net interest margin on a taxable-equivalent basis (4)
14,703
2.99
%
16,257
3.77
%
13,617
3.04
%
Ratio of interest-earning assets to interest-bearing liabilities
133.67
%
147.51
%
138.02
%
(1)
Includes non-accrual loans.
(2)
Income from tax-exempt securities is included in interest Income on a taxable-equivalent basis. Interest Income has been divided
(3)
The net interest spread is the difference between the average rate on total interest-earning assets and interest-bearing liabilities.
(4)
The net interest margin is the taxable-equivalent net interest income divided by average interest-earning assets.
LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31,
2023
(Unaudited)
December 31,
2022
ASSETS:
Cash and due from banks
$
36,535
20,244
Interest-bearing demand deposits
3,188
2,457
Total cash and cash equivalents
39,723
22,701
Investment securities:
Equity securities with a readily determinable fair value, at fair value
1,336
2,273
Equity securities without a readily determinable fair value, at cost
3,666
2,099
Debt securities, available-for-sale, at fair value
276,601
289,850
Debt securities, held-to-maturity, at cost, net
16,858
19,878
Federal Reserve Bank stock, at cost
5,086
4,652
Federal Home Loan Bank stock, at cost
15,176
4,415
Loans, net
1,712,946
1,395,632
Premises and equipment, net
36,302
33,042
Operating lease right-of-use assets
6,000
6,525
79,509
59,221
Core deposit and other intangibles, net
9,494
1,827
Bank-owned life insurance
49,847
44,298
Interest receivable
8,405
7,482
Other assets, net
30,643
25,503
TOTAL ASSETS
$
2,291,592
1,919,398
LIABILITIES:
Deposits:
Noninterest-bearing
$
462,267
505,824
Interest-bearing
1,362,122
1,099,146
Total deposits
1,824,389
1,604,970
Short-term borrowings
97,395
71,455
Long-term debt
113,123
19,072
Operating lease liabilities
6,261
6,647
Accrued interest and other liabilities
15,121
16,579
TOTAL LIABILITIES
2,056,289
1,718,723
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 16,384,952 and 14,270,550 shares at December 31, 2023 and December 31, 2022, respectively; outstanding 13,173,569 and 11,259,080 shares at December 31, 2023 and December 31, 2022, respectively
173,637
144,069
Retained earnings
140,017
139,249
Treasury shares at cost, 3,211,383 and 3,011,470 shares at December 31, 2023 and December 31, 2022, respectively
(56,015
)
(52,689
)
Accumulated other comprehensive loss, net of taxes
(22,336
)
(29,954
)
TOTAL SHAREHOLDERS' EQUITY
235,303
200,675
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
2,291,592
$
1,919,398
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,
2023
2022
2023
2022
INTEREST INCOME:
Interest and fees on loans
$
21,113
15,887
71,894
59,247
Dividends on equity securities:
With a readily determinable fair value
9
16
43
56
Without a readily determinable fair value
53
13
132
29
Interest on debt securities:
Taxable
1,273
1,355
5,235
5,027
Non-taxable
165
186
688
753
Other investments
697
262
1,607
641
TOTAL INTEREST INCOME
23,310
17,719
79,599
65,753
INTEREST EXPENSE:
Interest on deposits
6,354
1,189
16,571
3,682
Interest on short-term borrowings
918
96
4,060
416
Interest on long-term debt
1,379
226
2,619
613
TOTAL INTEREST EXPENSE
8,651
1,511
23,250
4,711
NET INTEREST INCOME
14,659
16,208
56,349
61,042
PROVISION FOR (RECOVERY OF) CREDIT LOSSES
2,218
(19
)
2,077
250
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) CREDIT LOSSES
12,441
16,227
54,272
60,792
NON-INTEREST INCOME:
1,828
1,617
7,091
6,468
Service charges and fees on deposit accounts
1,532
1,532
5,856
6,190
Bank-owned life insurance income
306
271
1,136
1,074
Gains from sales of loans
659
8
697
196
Other operating income
281
201
631
360
TOTAL NON-INTEREST INCOME
4,606
3,629
15,411
14,288
NON-INTEREST EXPENSE:
Salaries and employee benefits
7,654
7,192
29,108
28,483
Equipment expenses
441
395
1,616
1,629
Occupancy expense, net
934
767
3,301
3,067
State financial institutions tax
439
428
1,628
1,740
366
339
1,101
1,184
Amortization of intangibles
196
113
532
478
FDIC insurance premiums, net
269
133
932
530
Contracted services
798
601
2,776
2,503
Other real estate owned, net
1
8
4
(866
)
Merger-related expenses
3,914
—
4,656
—
Other non-interest expense
2,564
2,089
8,769
9,386
TOTAL NON-INTEREST EXPENSE
17,576
12,065
54,423
48,134
INCOME BEFORE INCOME TAXES
(529
)
7,791
15,260
26,946
PROVISION FOR (BENEFIT FROM) INCOME TAXES
(236
)
1,383
2,632
4,818
NET INCOME
$
(293
)
6,408
12,628
22,128
Earnings per common share:
Basic
$
(0.02
)
0.57
1.10
1.93
Diluted
$
(0.02
)
0.57
1.10
1.93
Weighted average common shares outstanding:
Basic
12,378,289
11,211,328
11,417,857
11,410,981
Diluted
12,378,289
11,211,328
11,417,857
11,410,981
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