LEBANON, Ohio--(BUSINESS WIRE)--
LCNB Corp. (LCNB) today announced net income of $2,611,000 (total basic
and diluted earnings per share of $0.28) and $3,934,000 (total basic and
diluted earnings per common share of $0.42) for the three and six months
ended June 30, 2014, respectively. This compares to net income of
$2,348,000 (total basic and diluted earnings per common share of $0.31
and $0.30, respectively) and $4,076,000 (total basic and diluted
earnings per common share of $0.54 and $0.53, respectively) for the same
three and six-month periods in 2013. Results for 2013 and 2014 were
significantly affected by the completion of mergers with First Capital
Bancshares, Inc. and its subsidiary, Citizens National Bank of
Chillicothe, on January 11, 2013 and Eaton National Bank & Trust Co.
("Eaton National") on January 24, 2014. In addition, 1,642,857 shares of
new voting common stock were issued during the fourth quarter 2013.
Commenting on the financial results, LCNB CEO Steve Wilson said, "We are
pleased to announce solid financial results for the second quarter and
first half of 2014. Our financial results were negatively impacted by
expenses related to the Eaton National merger, but, with the successful
integration of our recent acquisitions, we look forward to the synergies
that will benefit all our stakeholders."
Net interest income for the three and six months ended June 30, 2014
increased $1,646,000 and $3,031,000, respectively, from the comparative
periods in 2013 due primarily to the increased volume of average
interest earning assets provided from the merger with Eaton National and
by an increase in the net interest margin.
The provision for loan losses for the three and six months ended June
30, 2014 was $213,000 and $145,000 greater than the comparable periods
in 2013. Net loan charge-offs for the first six months of 2014 and 2013
totaled $531,000 and $202,000, respectively. Non-accrual loans and loans
past due 90 days or more and still accruing interest totaled $6,373,000
or 0.92% of total loans at June 30, 2014, compared to $3,211,000 or
0.56% of total loans at December 31, 2013. The increase was
predominately due to acquired impaired loans that were classified as
non-accrual during the second quarter 2014. Other real estate owned
(which includes property acquired through foreclosure or deed-in-lieu of
foreclosure and also includes property deemed to be in-substance
foreclosed) and other repossessed assets increased from $1,463,000 at
December 31, 2013 to $1,906,000 at June 30, 2014 primarily due to
foreclosures and property obtained through the merger with Eaton
National, partially offset by property sales.
Non-interest income for the three-month period in 2014 was $123,000
greater than the comparable period in 2013 and $307,000 less for the
six-month period. The three-month period was greater primarily due to
increases in trust income and service charges and fees on deposit
accounts, partially offset by a decrease in gains from sales of
investment securities and mortgage loans. For the six-month period,
increases in trust income and service charges and fees on deposit
accounts were more than offset by decreased gains from sales of
investment securities and mortgage loans. The increases in service
charges and fees were primarily due to a greater number of deposit
accounts resulting from the merger. The increase in trust income was due
to growth in the fair value of trust assets serviced and to fee
adjustments. The decreases in gains from sales of investment securities
and mortgage loans were due to lower sales volumes during the 2014
period.
Non-interest expense for the three and six months ended June 30, 2014
was $1,276,000 and $2,857,000 greater than the comparable periods in
2013. Salaries and employee benefits, as well as a variety of other
expense items, increased significantly due to the increased number of
employees and offices resulting from the merger with Eaton National.
Also contributing to the increase in non-interest expense was an
increase in other real estate owned expenses.
LCNB Corp. is a financial holding company headquartered in Lebanon,
Ohio. LCNB Corp.’s only business is ownership of LCNB National Bank,
which has 35 offices located in Warren, Butler, Montgomery, Clinton,
Clermont, Hamilton, Fayette, Ross, and Preble Counties, Ohio. Additional
information about LCNB Corp. and information about products and services
offered by LCNB National Bank can be found on the internet at www.lcnb.com.
Certain matters disclosed herein may be deemed to be forward-looking
statements that involve risks and uncertainties, including regulatory
policy changes, interest rate fluctuations, loan demand, loan
delinquencies and losses, and other risks. Actual strategies and results
in future time periods may differ materially from those currently
expected. Such forward-looking statements represent management’s
judgment as of the current date. LCNB disclaims any intent or obligation
to update such forward-looking statements. LCNB intends such
forward-looking statements to be covered by the safe harbor provisions
for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
LCNB Corp. and Subsidiaries
Financial Highlights
(Dollars
in thousands, except per share amounts)
|
|
| |
| |
| | Three Months Ended | | Six Months Ended |
| | 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
| 9/30/2013 |
| 6/30/2013 | | 6/30/2014 |
| 6/30/2013 |
Condensed Income Statement | | | | | | | | | | | | | | | | | | | | | |
|
Interest income
| |
$
|
9,926
| | |
9,278
| | |
8,566
| | |
8,450
| | |
8,405
| | |
19,204
| | |
16,481
| |
|
Interest expense
| |
920
|
| |
915
|
| |
927
|
| |
995
|
| |
1,045
|
| |
1,835
|
| |
2,143
|
|
|
Net interest income
| |
9,006
| | |
8,363
| | |
7,639
| | |
7,455
| | |
7,360
| | |
17,369
| | |
14,338
| |
|
Provision for loan losses
| |
255
|
| |
81
|
| |
219
|
| |
178
|
| |
42
|
| |
336
|
| |
191
|
|
|
Net interest income after provision
| |
8,751
| | |
8,282
| | |
7,420
| | |
7,277
| | |
7,318
| | |
17,033
| | |
14,147
| |
|
Non-interest income
| |
2,301
| | |
2,077
| | |
2,358
| | |
2,047
| | |
2,178
| | |
4,378
| | |
4,685
| |
|
Non-interest expense
| |
7,600
|
| |
8,672
|
| |
6,634
|
| |
6,163
|
| |
6,324
|
| |
16,272
|
| |
13,415
|
|
|
Income before income taxes
| |
3,452
| | |
1,687
| | |
3,144
| | |
3,161
| | |
3,172
| | |
5,139
| | |
5,417
| |
|
Provision for income taxes
| |
841
|
| |
364
|
| |
797
|
| |
804
|
| |
824
|
| |
1,205
|
| |
1,341
|
|
|
Net income
| |
$
|
2,611
|
| |
1,323
|
| |
2,347
|
| |
2,357
|
| |
2,348
|
| |
3,934
|
| |
4,076
|
|
| | | | | | | | | | | | | | | | | | | | |
|
Per Share Data | | | | | | | | | | | | | | | | | | | | | |
|
Dividends per share
| |
$
|
0.16
| | |
0.16
| | |
0.16
| | |
0.16
| | |
0.16
| | |
0.32
| | |
0.32
| |
|
Basic earnings per share
| |
$
|
0.28
| | |
0.14
| | |
0.27
| | |
0.31
| | |
0.31
| | |
0.42
| | |
0.54
| |
|
Diluted earnings per share
| |
$
|
0.28
| | |
0.14
| | |
0.27
| | |
0.30
| | |
0.30
| | |
0.42
| | |
0.53
| |
|
Book value per share
| |
$
|
13.18
| | |
12.89
| | |
12.80
| | |
12.07
| | |
11.82
| | |
13.18
| | |
11.82
| |
|
Tangible book value per share
| |
$
|
9.71
| | |
9.44
| | |
11.02
| | |
9.93
| | |
9.64
| | |
9.71
| | |
9.64
| |
|
Average basic shares outstanding
| |
9,293,382
| | |
9,288,400
| | |
8,623,134
| | |
7,636,098
| | |
7,627,900
| | |
9,290,905
| | |
7,570,817
| |
|
Average diluted shares outstanding
| |
9,402,343
| | |
9,413,049
| | |
8,755,416
| | |
7,787,098
| | |
7,759,438
| | |
9,407,964
| | |
7,686,890
| |
|
Shares outstanding at period end
| |
9,298,270
| | |
9,292,226
| | |
9,287,536
| | |
7,640,163
| | |
7,633,679
| | |
9,298,270
| | |
7,633,679
| |
| | | | | | | | | | | | | | | | | | | | |
|
Selected Financial Ratios | | | | | | | | | | | | | | | | | | | | | |
|
Return on average assets
| |
0.91
|
%
| |
0.50
|
%
| |
0.98
|
%
| |
0.99
|
%
| |
0.99
|
%
| |
0.72
|
%
| |
0.88
|
%
|
|
Return on average equity
| |
8.60
|
%
| |
4.47
|
%
| |
8.48
|
%
| |
10.27
|
%
| |
9.91
|
%
| |
6.57
|
%
| |
8.75
|
%
|
|
Dividend payout ratio
| |
57.14
|
%
| |
114.29
|
%
| |
59.26
|
%
| |
51.61
|
%
| |
51.61
|
%
| |
76.19
|
%
| |
59.26
|
%
|
|
Net interest margin (tax equivalent)
| |
3.59
|
%
| |
3.66
|
%
| |
3.63
|
%
| |
3.57
|
%
| |
3.54
|
%
| |
3.62
|
%
| |
3.54
|
%
|
|
Efficiency ratio
| |
67.21
|
%
| |
83.07
|
%
| |
66.36
|
%
| |
64.86
|
%
| |
66.30
|
%
| |
74.82
|
%
| |
70.52
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Selected Balance Sheet Items | | | | | | | | | | | | | | | | | | | | | |
|
Investment securities and stock
| |
$
|
357,567
| | |
331,771
| | |
279,021
| | |
296,819
| | |
304,934
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
|
Loans
| |
691,719
| | |
685,196
| | |
574,354
| | |
566,109
| | |
556,314
| | | | | | | |
|
Less allowance for loan losses
| |
3,394
|
| |
3,370
|
| |
3,588
|
| |
3,423
|
| |
3,426
|
| | | | | | |
|
Net loans
| |
688,325
| | |
681,826
| | |
570,766
| | |
562,686
| | |
552,888
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
|
Total assets
| |
1,151,109
| | |
1,133,508
| | |
932,338
| | |
942,349
| | |
945,510
| | | | | | | |
|
Total deposits
| |
986,824
| | |
984,514
| | |
785,761
| | |
808,335
| | |
800,813
| | | | | | | |
|
Short-term borrowings
| |
23,523
| | |
11,215
| | |
8,655
| | |
22,811
| | |
36,272
| | | | | | | |
|
Long-term debt
| |
11,506
| | |
11,580
| | |
12,102
| | |
12,446
| | |
12,788
| | | | | | | |
|
Total shareholders’ equity
| |
122,584
| | |
119,761
| | |
118,873
| | |
92,215
| | |
90,229
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
|
Tangible common equity (TCE)
| |
89,800
| | |
87,017
| | |
101,893
| | |
75,353
| | |
73,065
| | | | | | | |
|
Tangible common assets (TCA)
| |
1,118,325
| | |
1,100,764
| | |
915,358
| | |
925,487
| | |
928,346
| | | | | | | |
|
TCE/TA
| |
8.03
|
%
| |
7.91
|
%
| |
11.13
|
%
| |
8.14
|
%
| |
7.87
|
%
| | | | | | |
|
Loans to deposit ratio
| |
70.10
|
%
| |
69.60
|
%
| |
73.10
|
%
| |
70.03
|
%
| |
69.47
|
%
| | | | | | |
|
Equity to assets ratio
| |
10.65
|
%
| |
10.57
|
%
| |
12.75
|
%
| |
9.79
|
%
| |
9.54
|
%
| | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
|
| | Three Months Ended | | Six Months Ended |
| | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 | | 6/30/2014 | | 6/30/2013 |
Asset Quality | | | | | | | | | | | | | | | | | | | | | |
|
Net charge-offs
| |
232
| | |
299
| | |
54
| | |
181
| | |
20
| | | | | | | |
|
Other real estate owned
| |
1,906
| | |
1,799
| | |
1,463
| | |
1,561
| | |
1,530
| | | | | | | |
|
Non-accrual loans
| |
6,243
| | |
5,374
| | |
2,961
| | |
2,828
| | |
3,026
| | | | | | | |
|
Loans past due 90 days or more and still accruing
| |
130
|
| |
825
|
| |
250
|
| |
29
|
| |
113
|
| | | | | | |
|
Total nonperforming loans
| |
6,373
| | |
6,199
| | |
3,211
| | |
2,857
| | |
3,139
| | | | | | | |
|
Net charge-offs to average loans
| |
0.14
|
%
| |
0.19
|
%
| |
0.04
|
%
| |
0.13
|
%
| |
0.01
|
%
| | | | | | |
|
Allowance for loan losses to total loans
| |
0.49
|
%
| |
0.49
|
%
| |
0.62
|
%
| |
0.60
|
%
| |
0.62
|
%
| | | | | | |
|
Nonperforming loans to total loans
| |
0.92
|
%
| |
0.90
|
%
| |
0.56
|
%
| |
0.50
|
%
| |
0.56
|
%
| | | | | | |
|
Nonperforming assets to total assets
| |
0.72
|
%
| |
0.71
|
%
| |
0.50
|
%
| |
0.47
|
%
| |
0.49
|
%
| | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
Non-GAAP Financial Measures | | | | | | | | | | | | | | | | | | | | | |
|
Net income
| |
$
|
2,611
| | |
1,323
| | |
2,347
| | |
2,357
| | |
2,348
| | |
3,934
| | |
4,076
| |
|
Less (add) net gain (loss) on sales of securities, net of tax
| |
0
| | |
(3
|
)
| |
203
| | |
38
| | |
71
| | |
(3
|
)
| |
459
| |
|
Add merger-related expenses, net of tax
| |
46
|
| |
853
|
| |
71
|
| |
0
|
| |
180
|
| |
899
|
| |
909
|
|
|
Core net income
| |
$
|
2,657
| | |
2,179
| | |
2,215
| | |
2,319
| | |
2,457
| | |
4,836
| | |
4,526
| |
|
Basic core earnings per share
| |
$
|
0.29
| | |
0.23
| | |
0.26
| | |
0.30
| | |
0.32
| | |
0.52
| | |
0.60
| |
|
Diluted core earnings per share
| |
$
|
0.28
| | |
0.23
| | |
0.25
| | |
0.30
| | |
0.32
| | |
0.51
| | |
0.59
| |
|
Adjusted return on average assets
| |
0.93
|
%
| |
0.82
|
%
| |
0.92
|
%
| |
0.97
|
%
| |
1.03
|
%
| |
0.88
|
%
| |
0.97
|
%
|
|
Adjusted return on average equity
| |
8.67
|
%
| |
7.32
|
%
| |
7.97
|
%
| |
10.06
|
%
| |
10.33
|
%
| |
8.02
|
%
| |
9.67
|
%
|
|
Core efficiency ratio
| |
66.60
|
%
| |
70.66
|
%
| |
67.36
|
%
| |
65.26
|
%
| |
64.18
|
%
| |
68.55
|
%
| |
65.96
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands)
|
|
| |
| |
| | June 30, 2014 | | December 31,
2013
|
| |
(Unaudited)
| |
| ASSETS: | | | | | | |
|
Cash and due from banks
| |
$
|
18,771
| | |
10,410
| |
|
Interest-bearing demand deposits
| |
110
|
| |
4,278
|
|
|
Total cash and cash equivalents
| |
18,881
| | |
14,688
| |
|
Investment securities:
| | | | | | |
|
Available-for-sale, at fair value
| |
327,740
| | |
258,241
| |
|
Held-to-maturity, at cost
| |
23,843
| | |
16,323
| |
| Federal Reserve Bank stock, at cost
| |
2,346
| | |
1,603
| |
| Federal Home Loan Bank stock, at cost
| |
3,638
| | |
2,854
| |
|
Loans, net
| |
688,325
| | |
570,766
| |
|
Premises and equipment, net
| |
21,230
| | |
19,897
| |
|
Goodwill
| |
27,638
| | |
14,186
| |
|
Bank owned life insurance
| |
21,607
| | |
21,280
| |
|
Other assets
| |
15,861
|
| |
12,500
|
|
| TOTAL ASSETS | |
$
|
1,151,109
|
| |
932,338
|
|
| LIABILITIES: | | | | | | |
|
Deposits:
| | | | | | |
|
Noninterest-bearing
| |
$
|
201,928
| | |
164,912
| |
|
Interest-bearing
| |
784,896
|
| |
620,849
|
|
|
Total deposits
| |
986,824
| | |
785,761
| |
|
Short-term borrowings
| |
23,523
| | |
8,655
| |
|
Long-term debt
| |
11,506
| | |
12,102
| |
|
Accrued interest and other liabilities
| |
6,672
|
| |
6,947
|
|
| TOTAL LIABILITIES | |
1,028,525
|
| |
813,465
|
|
| SHAREHOLDERS' EQUITY: | | | | | | |
|
Preferred shares – no par value, authorized 1,000,000 shares, none
outstanding
| |
—
| | |
—
| |
|
Common shares – no par value, authorized 12,000,000 shares, issued
10,051,897 and 10,041,163 shares at June 30, 2014 and December 31,
2013, respectively
| |
66,974
| | |
66,785
| |
|
Retained earnings
| |
66,437
| | |
65,475
| |
|
Treasury shares at cost, 753,627 shares at June 30, 2014 and
December 31, 2013 | |
(11,665
|
)
| |
(11,665
|
)
|
|
Accumulated other comprehensive loss, net of taxes
| |
838
|
| |
(1,722
|
)
|
| TOTAL SHAREHOLDERS' EQUITY | |
122,584
|
| |
118,873
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | |
$
|
1,151,109
|
| |
932,338
|
|
| | | | | | |
|
LCNB CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
|
|
| |
| |
| |
Three Months Ended
June 30,
| |
Six Months Ended
June 30,
|
| |
2014
|
|
2013
| |
2014
|
|
2013
|
| INTEREST INCOME: | | | | | | | | | | | |
|
Interest and fees on loans
| |
$
|
8,144
| | |
6,816
| | |
15,840
| | |
13,396
|
|
Interest on investment securities –
| | | | | | | | | | | |
|
Taxable
| |
1,026
| | |
860
| | |
1,917
| | |
1,694
|
|
Non-taxable
| |
657
| | |
655
| | |
1,303
| | |
1,278
|
|
Other short-term investments
| |
99
|
| |
74
|
| |
144
|
| |
113
|
|
TOTAL INTEREST INCOME
| |
9,926
|
| |
8,405
|
| |
19,204
|
| |
16,481
|
| INTEREST EXPENSE: | | | | | | | | | | | |
|
Interest on deposits
| |
814
| | |
931
| | |
1,623
| | |
1,914
|
|
Interest on short-term borrowings
| |
5
| | |
4
| | |
8
| | |
7
|
|
Interest on long-term debt
| |
101
|
| |
110
|
| |
204
|
| |
222
|
|
TOTAL INTEREST EXPENSE
| |
920
|
| |
1,045
|
| |
1,835
|
| |
2,143
|
|
NET INTEREST INCOME
| |
9,006
| | |
7,360
| | |
17,369
| | |
14,338
|
|
PROVISION FOR LOAN LOSSES
| |
255
|
| |
42
|
| |
336
|
| |
191
|
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
| |
8,751
|
| |
7,318
|
| |
17,033
|
| |
14,147
|
| NON-INTEREST INCOME: | | | | | | | | | | | |
|
Trust income
| |
728
| | |
609
| | |
1,383
| | |
1,184
|
|
Service charges and fees on deposit accounts
| |
1,252
| | |
1,073
| | |
2,374
| | |
2,052
|
|
Net gain (loss) on sales of securities
| |
—
| | |
108
| | |
(4
|
)
| |
695
|
|
Bank owned life insurance income
| |
170
| | |
172
| | |
342
| | |
344
|
|
Gains from sales of mortgage loans
| |
53
| | |
119
| | |
68
| | |
248
|
|
Other operating income
| |
98
|
| |
97
|
| |
215
|
| |
162
|
|
TOTAL NON-INTEREST INCOME
| |
2,301
|
| |
2,178
|
| |
4,378
|
| |
4,685
|
| NON-INTEREST EXPENSE: | | | | | | | | | | | |
|
Salaries and employee benefits
| |
3,956
| | |
3,242
| | |
7,874
| | |
6,536
|
|
Equipment expenses
| |
345
| | |
298
| | |
639
| | |
590
|
|
Occupancy expense, net
| |
514
| | |
518
| | |
1,165
| | |
1,024
|
|
State franchise tax
| |
239
| | |
211
| | |
483
| | |
427
|
|
Marketing
| |
197
| | |
157
| | |
329
| | |
301
|
| FDIC insurance premiums
| |
160
| | |
119
| | |
309
| | |
247
|
|
Merger-related expenses
| |
70
| | |
271
| | |
1,362
| | |
1,326
|
|
Other non-interest expense
| |
2,119
|
| |
1,508
|
| |
4,111
|
| |
2,964
|
|
TOTAL NON-INTEREST EXPENSE
| |
7,600
|
| |
6,324
|
| |
16,272
|
| |
13,415
|
| INCOME BEFORE INCOME TAXES | |
3,452
| | |
3,172
| | |
5,139
| | |
5,417
|
|
PROVISION FOR INCOME TAXES
| |
841
|
| |
824
|
| |
1,205
|
| |
1,341
|
| NET INCOME | |
$
|
2,611
|
| |
2,348
|
| |
3,934
|
| |
4,076
|
|
Dividends declared per common share
| |
$
|
0.16
| | |
0.16
| | |
0.32
| | |
0.32
|
|
Earnings per common share:
| | | | | | | | | | | |
|
Basic
| |
$
|
0.28
| | |
0.31
| | |
0.42
| | |
0.54
|
|
Diluted
| |
0.28
| | |
0.30
| | |
0.42
| | |
0.53
|
|
Weighted average common shares outstanding:
| | | | | | | | | | | |
|
Basic
| |
9,293,382
| | |
7,627,900
| | |
9,290,905
| | |
7,570,817
|
|
Diluted
| |
9,402,343
| | |
7,759,438
| | |
9,407,964
| | |
7,686,890
|
| | | | | | | | | | |
|
LCNB Corp.
Stephen P. Wilson, Chairman and CEO, 800-344-BANK
or
Steve
P. Foster, President, 800-344-BANK
Source: LCNB Corp.