Document

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 20, 2020

LCNB CORP.

(Exact name of Registrant as specified in its Charter)



Ohio	001-35292	31-1626393
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification Number)



2 North Broadway, Lebanon, Ohio	45036
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (513) 932-1414

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☒ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, No Par Value	LCNB	NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On April 20, 2020, LCNB Corp. issued an earnings release announcing its financial results for the three months ended March 31, 2020. A copy of the earnings release (Exhibit 99.1) and unaudited financial highlights (Exhibit 99.2) are attached and are furnished under this Item 2.02.

Item 7.01 Regulation FD Disclosure.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No. Description


99.1	Earnings Press Release Dated April 20, 2020


99.2	Unaudited Financial Highlights

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.



	LCNB CORP.


Date: April 20, 2020	By: /s/ Robert C. Haines II
		Robert C. Haines II Chief Financial Officer
		Robert C. Haines II Chief Financial Officer

Exhibit 99.1

Press Release

April 20, 2020

LCNB CORP. REPORTS FINANCIAL RESULTS FOR

THE THREE MONTHS ENDED MARCH 31, 2020

LEBANON, Ohio--LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced net income of $5,026,000 (total basic and diluted earnings per share of $0.39) for the three months ended March 31, 2020. This compares to net income of $4,627,000 (total basic and diluted earnings per share of $0.35) for the same three month period in 2019.

Commenting on the financial results, LCNB President and Chief Executive Officer Eric Meilstrup said, "The first quarter of 2020 has brought unique and unprecedented circumstances and challenges to everyone. Despite these challenges, LCNB performed well during the quarter. Even with a $1,173,000 provision for loan losses, LCNB achieved a 1.23% return on average assets and an 8.75% return on average equity."

Net interest income for the three months ended March 31, 2020 was $787,000 greater than the comparable period in 2019, due primarily to growth in the average balance of LCNB's loan portfolio and to an increase in the average rate earned on that portfolio. Also contributing to the increase in net interest income were a decrease in the average rate paid on deposits and decreases in the average amount of and average rate paid on short-term borrowings. These favorable items were partially offset by a decrease in average investment securities.

The provision for loan losses for the three months ended March 31, 2020 was $1,278,000 greater than the comparable period in 2019. The provision included an adjustment to the allowance for loan losses for losses that may result from a potential economic recession caused by the Covid-19 pandemic. Non-accrual loans and loans past due 90 days or more and still accruing interest decreased $154,000, from $3,022,000 or 0.25% of total loans at March 31, 2019 to $2,868,000 or 0.23% of total loans at March 31, 2020.

Non-interest income for the three months ended March 31, 2020 was $1,067,000 greater than the comparable period in 2019 primarily due to increases in fiduciary income, gains from sales of securities and loans, increases in income from bank owned life insurance, and market-driven increases in the fair value of equity security investments, which were recorded in other operating income in the consolidated statements of income. Income from bank owned life insurance increased partially due to new policies purchased in the third quarter 2019 and partially due to a benefit received during the first quarter 2020.

Non-interest expense for the three months ended March 31, 2020 was $372,000 greater than the comparable period in 2019, primarily due to increases in salaries and employee benefits, partially offset by decreases in marketing expense and FDIC insurance premiums. Salaries and employee benefits increased primarily due to salary and wage increases and newly hired employees, including additional business development positions. An increase in health insurance costs also contributed to the increase in salaries and employee benefits. FDIC insurance premiums decreased due to a small bank assessment credit received during the first quarter 2020. LCNB has used the substantial portion of the credit and anticipates quarterly premium payments will resume in the second quarter 2020.

The provision for income taxes for the first quarter 2020 is $195,000 less than the comparable quarter in 2019 primarily due to a one-time tax benefit recognized as a result of certain provisions in the Coronavirus Aid, Relief, & Economic Security ("CARES") Act passed by Congress and signed by the President during the first quarter 2020.

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, 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.

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, 2019, 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:


1.	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;


3.	LCNB’s ability to integrate recent and future acquisitions may be unsuccessful, or may be more difficult, time-consuming or costly than expected;


4.	LCNB may incur increased charge-offs in the future;


5.	LCNB may face competitive loss of customers;


6.	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;


7.	changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;


8.	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;


9.	LCNB may experience difficulties growing loan and deposit balances;


10.	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;


11.	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;


12.	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;


13.	adverse weather events and natural disasters and global and/or national epidemics; and

14.

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.

Exhibit 99.2

LCNB Corp. and Subsidiaries

Financial Highlights

(Dollars in thousands, except per share amounts)

(Unaudited)



	Three Months Ended
	3/31/2020			12/31/2019		9/30/2019		6/30/2019		3/31/2019
Condensed Income Statement
Interest income	$	16,556		16,424		16,329		16,328		16,113
Interest expense	2,378			2,577		2,751		2,738		2,722
Net interest income	14,178			13,847		13,578		13,590		13,391
Provision (credit) for loan losses	1,173			(6	)	264		54		(105	)
Net interest income after provision	13,005			13,853		13,314		13,536		13,496
Non-interest income	3,839			3,222		3,356		2,998		2,772
Non-interest expense	11,072			11,007		10,982		10,833		10,700
Income before income taxes	5,772			6,068		5,688		5,701		5,568
Provision for income taxes	746			1,238		961		973		941
Net income	$	5,026		4,830		4,727		4,728		4,627
Amort/Accret income on acquired loans	$	667		400		302		355		224
Amort/Accret expenses on acquired interest-bearing liabilities	$	3		3		4		142		144
Tax-equivalent net interest income	$	14,254		13,937		13,679		13,700		13,536

Per Share Data
Dividends per share	$	0.18		0.18		0.17		0.17		0.17
Basic earnings per common share	$	0.39		0.37		0.36		0.36		0.35
Diluted earnings per common share	$	0.39		0.37		0.36		0.36		0.35
Book value per share	$	18.00		17.63		17.44		17.18		16.83
Tangible book value per share	$	13.18		12.78		12.57		12.31		12.05
Weighted average common shares outstanding:
Basic	12,926,077			12,912,106		12,932,950		13,192,691		13,283,634
Diluted	12,927,666			12,916,000		12,937,145		13,196,665		13,287,338
Shares outstanding at period end	12,969,076			12,936,783		12,927,463		12,978,554		13,314,148

Selected Financial Ratios
Return on average assets	1.23		%	1.17	%	1.13	%	1.16	%	1.15	%
Return on average equity	8.75		%	8.42	%	8.33	%	8.46	%	8.47	%
Dividend payout ratio	46.15		%	48.65	%	47.22	%	47.22	%	48.57	%
Net interest margin (tax equivalent)	3.92		%	3.76	%	3.67	%	3.72	%	3.71	%
Efficiency ratio (tax equivalent)	61.19		%	64.15	%	64.47	%	64.87	%	65.61	%

Selected Balance Sheet Items
Cash and cash equivalents	$	24,795		20,765		22,826		23,185		19,527
Debt and equity securities	183,123			219,791		239,730		246,701		264,559

Loans:
Commercial and industrial	$	85,356		78,306		71,576		79,513		79,725
Commercial, secured by real estate	829,461			804,953		797,842		793,863		764,424
Residential real estate	318,009			322,533		320,703		326,029		334,227
Consumer	28,955			25,232		23,918		19,649		17,409
Agricultural	10,519			11,509		11,525		10,843		10,900
Other, including deposit overdrafts	436			1,193		456		373		409
Deferred net origination costs (fees)	(349		)	(275	)	(128	)	(9	)	40
Loans, gross	1,272,387			1,243,451		1,225,892		1,230,261		1,207,134
Less allowance for loan losses	5,008			4,045		4,167		4,112		4,126
Loans, net	$	1,267,379		1,239,406		1,221,725		1,226,149		1,203,008

Total earning assets	$	1,462,485		1,466,988		1,470,074		1,482,913		1,476,862
Total assets	1,636,280			1,639,308		1,644,447		1,642,012		1,632,387
Total deposits	1,345,872			1,348,280		1,355,383		1,357,959		1,347,857



	Three Months Ended
	3/31/2020			12/31/2019		9/30/2019		6/30/2019		3/31/2019
Selected Balance Sheet Items, continued
Long-term debt	35,996			40,994		41,990		41,986		42,982
Total shareholders’ equity	233,478			228,048		225,492		222,972		224,018
Equity to assets ratio	14.27		%	13.91	%	13.71	%	13.58	%	13.72	%
Loans to deposits ratio	94.54		%	92.22	%	90.45	%	90.60	%	89.56	%

Tangible common equity (TCE)	$	170,994		165,304		162,485		159,702		160,488
Tangible common assets (TCA)	1,573,796			1,576,564		1,581,440		1,578,742		1,568,857
TCE/TCA	10.87		%	10.49	%	10.27	%	10.12	%	10.23	%

Selected Average Balance Sheet Items
Cash and cash equivalents	$	25,101		26,501		28,293		29,523		25,080
Debt and equity securities	204,912			231,115		243,553		249,954		266,081

Loans	$	1,252,554		1,230,845		1,227,806		1,217,726		1,208,809
Less allowance for loan losses	3,938			4,076		3,986		4,088		4,074
Net loans	$	1,248,616		1,226,769		1,223,820		1,213,638		1,204,735

Total earning assets	$	1,462,946		1,469,469		1,480,096		1,479,225		1,480,634
Total assets	1,638,486			1,643,793		1,654,034		1,637,645		1,635,416
Total deposits	1,346,770			1,352,101		1,365,702		1,352,449		1,333,529
Short-term borrowings	1,415			622		468		243		23,235
Long-term debt	38,325			41,742		41,988		42,567		44,676
Total shareholders’ equity	231,058			227,595		225,216		224,203		221,470
Equity to assets ratio	14.10		%	13.85	%	13.62	%	13.69	%	13.54	%
Loans to deposits ratio	93.00		%	91.03	%	89.90	%	90.04	%	90.65	%

Asset Quality
Net charge-offs (recoveries)	$	210		115		209		68		(185	)
Other real estate owned	0			197		197		197		244

Non-accrual loans	2,829			3,210		3,523		2,962		2,845
Loans past due 90 days or more and still accruing	39			—		—		24		177
Total nonperforming loans	$	2,868		3,210		3,523		2,986		3,022

Net charge-offs (recoveries) to average loans	0.07		%	0.04	%	0.07	%	0.02	%	(0.06	)%
Allowance for loan losses to total loans	0.39		%	0.33	%	0.34	%	0.33	%	0.34	%
Nonperforming loans to total loans	0.23		%	0.26	%	0.29	%	0.24	%	0.25	%
Nonperforming assets to total assets	0.18		%	0.21	%	0.23	%	0.19	%	0.20	%

Assets Under Management
LCNB Corp. total assets	$	1,636,280		1,639,308		1,644,447		1,642,012		1,632,387
Trust and investments (fair value)	455,974			435,664		411,724		382,462		367,649
Mortgage loans serviced	94,805			93,596		90,784		88,444		89,049
Cash management	77,471			75,948		117,530		71,973		55,981
Brokerage accounts (fair value)	235,278			268,059		262,038		260,202		245,758
Total assets managed	$	2,499,808		2,512,575		2,526,523		2,445,093		2,390,824

Non-GAAP Financial Measures
Net income	$	5,026		4,830		4,727		4,728		4,627
Add: merger-related expenses, net of tax	0			0		21		16		53
Adjusted net income	$	5,026		4,830		4,748		4,744		4,680
Basic adjusted earnings per share	0.39			0.37		0.37		0.36		0.36
Diluted adjusted earnings per share	0.39			0.37		0.37		0.36		0.36
Adjusted return on average assets	1.23		%	1.17	%	1.14	%	1.16	%	1.16	%
Adjusted return on average equity	8.75		%	8.42	%	8.36	%	8.49	%	8.57	%

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands)



	March 31, 2020 (Unaudited)			December 31, 2019
ASSETS:
Cash and due from banks	$	17,820		17,019
Interest-bearing demand deposits	6,975			3,746
Total cash and cash equivalents	24,795			20,765
Investment securities:
Equity securities with a readily determinable fair value, at fair value	2,036			2,312
Equity securities without a readily determinable fair value, at cost	2,099			2,099
Debt securities, available-for-sale, at fair value	141,439			178,000
Debt securities, held-to-maturity, at cost	27,694			27,525
Federal Reserve Bank stock, at cost	4,652			4,652
Federal Home Loan Bank stock, at cost	5,203			5,203
Loans, net	1,267,379			1,239,406
Premises and equipment, net	35,017			34,787
Operating leases right of use asset	5,621			5,444
Goodwill	59,221			59,221
Core deposit and other intangibles	3,751			4,006
Bank owned life insurance	41,309			41,667
Other assets	16,064			14,221
TOTAL ASSETS	$	1,636,280		1,639,308

LIABILITIES:
Deposits:
Noninterest-bearing	$	342,442		354,391
Interest-bearing	1,003,430			993,889
Total deposits	1,345,872			1,348,280
Long-term debt	35,996			40,994
Operating leases liability	5,659			5,446
Accrued interest and other liabilities	15,275			16,540
TOTAL LIABILITIES	1,402,802			1,411,260

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 at March 31, 2020 and December 31, 2019; issued 14,144,103 and 14,111,810 shares at March 31, 2020 and December 31, 2019, respectively	142,046			141,791
Retained earnings	107,123			104,431
Treasury shares at cost, 1,175,027 shares at March 31, 2020 and December 31, 2019	(18,847		)	(18,847	)
Accumulated other comprehensive income, net of taxes	3,156			673
TOTAL SHAREHOLDERS' EQUITY	233,478			228,048
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,636,280		1,639,308

LCNB CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)



	Three Months Ended March 31,
	2020			2019
INTEREST INCOME:
Interest and fees on loans	$	15,227		14,538
Dividends on equity securities with a readily determinable fair value	14			17
Dividends on equity securities without a readily determinable fair value	16			16
Interest on debt securities, taxable	950			869
Interest on debt securities, non-taxable	285			544
Interest on interest-bearing time deposits	—			5
Other investments	64			124
TOTAL INTEREST INCOME	16,556			16,113
INTEREST EXPENSE:
Interest on deposits	2,117			2,286
Interest on short-term borrowings	7			219
Interest on long-term debt	254			217
TOTAL INTEREST EXPENSE	2,378			2,722
NET INTEREST INCOME	14,178			13,391
PROVISION (CREDIT) FOR LOAN LOSSES	1,173			(105	)
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	13,005			13,496
NON-INTEREST INCOME:
Fiduciary income	1,103			1,034
Service charges and fees on deposit accounts	1,295			1,308
Net gains (losses) on sales of debt securities	221			(18	)
Bank owned life insurance income	601			182
Gains from sales of loans	120			29
Other operating income	499			237
TOTAL NON-INTEREST INCOME	3,839			2,772
NON-INTEREST EXPENSE:
Salaries and employee benefits	6,768			6,162
Equipment expenses	287			266
Occupancy expense, net	682			763
State financial institutions tax	436			438
Marketing	177			302
Amortization of intangibles	260			257
FDIC insurance premiums (credit), net	(1		)	126
Contracted services	402			464
Other real estate owned	(10		)	3
Merger-related expenses	—			67
Other non-interest expense	2,071			1,852
TOTAL NON-INTEREST EXPENSE	11,072			10,700
INCOME BEFORE INCOME TAXES	5,772			5,568
PROVISION FOR INCOME TAXES	746			941
NET INCOME	$	5,026		4,627

Dividends declared per common share	$	0.18		0.17
Earnings per common share:
Basic	0.39			0.35
Diluted	0.39			0.35
Weighted average common shares outstanding:
Basic	12,926,077			13,283,634
Diluted	12,927,666			13,287,338

Contacts

LCNB Corp.

Eric J. Meilstrup, CEO and President, 800-344-BANK

Robert C. Haines II, Executive Vice President and CFO, 800-344-BANK