Lcnb Corp (LCNB) 10-K Annual Report March 2019

LEBANON, Ohio--LCNB Corp. ("LCNB") (NASDAQ: LCNB) today announced net income of $5,193,000 (total basic and diluted earnings per share of $0.40) and $14,845,000 (total basic and diluted earnings per share of $1.24) for the three and twelve months ended December 31, 2018, respectively. This compares to net income of $3,617,000 (total basic and diluted earnings per share of $0.37 and $0.36, respectively) and $12,972,000 (total basic and diluted earnings per share of $1.30 and $1.29, respectively) for the same three and twelve month periods in 2017. Items significantly affecting net income during the 2018 period were:


•	a merger with Columbus First Bancorp, Inc. ("Columbus First") on May 31, 2018,


•	expenses relating to the merger with Columbus First, which totaled $164,000 and $2,123,000 for the three and twelve month periods, respectively,


•	a net loss of $461,000 on the sale of fixed assets primarily due to the sale of two buildings, and


•	a reduction in LCNB's federal tax rate from 34% to 21% as a result of the Tax Cuts and Jobs Act that was signed into law on December 22, 2017.

Commenting on the financial results, LCNB Chief Executive Officer Steve Foster said, "We are pleased to report our financial results for the three and twelve months ended December 31, 2018. Net income for the three and twelve months ended December 31, 2018 was greater than the comparable periods in 2017, despite merger-related expenses recognized for the acquisition of Columbus First. The merger with Columbus First, combined with organic growth, had a positive effect on net interest income, which was $7.3 million greater in 2018 than in 2017. Return on average assets equaled 1.27% and 1.00% for the three and twelve month periods in 2018. Eliminating merger-related expenses from the income statement produces pro-forma net income of $5,341,000 and $16,598,000 for the three and twelve month periods in 2018, respectively. Pro-forma return on average asset ratios for the three and twelve month periods were 1.30% and 1.11%, respectively."

Net interest income for the three and twelve months ended December 31, 2018 was, respectively, $2,853,000 and $7,305,000 greater than the comparable periods in 2017, primarily due to growth in LCNB's average loan portfolio, partially offset by a decrease in average investment securities and increases in average deposits and long-term borrowings. Also offsetting the growth in the loan portfolio was a market-driven increase in average rates paid on deposits. Loans, deposits, and long-term borrowings obtained through the merger with Columbus First were a significant component of LCNB's loan portfolio growth and the increases in deposits and long-term borrowings.

The provision for loan losses for the twelve months ended December 31, 2018 was $708,000 greater than the comparable period in 2017. Non-accrual loans and loans past due 90 days or more and still accruing interest increased $140,000, from $2,965,000 or 0.35% of total loans at December 31, 2017 to $3,105,000 or 0.26% of total loans at December 31, 2018.

Non-interest income for the three and twelve months ended December 31, 2018 was, respectively, $123,000 and $592,000 greater than the comparable periods in 2017 primarily due to increases in fiduciary income and service charges and fees on deposit accounts, partially offset by a decrease in net gains (losses) from sales of securities.

Non-interest expense for the three and twelve months ended December 31, 2018 was, respectively, $1,313,000 and $6,639,000 greater than the comparable periods in 2017 primarily due to increases in salaries and employee benefits and merger-related expenses. Also contributing to the increase during the twelve month period were losses incurred from the sale of two of LCNB's office buildings. Merger-related expenses increased due to costs connected to the acquisition of Columbus First.

The merger with Columbus First was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at their estimated fair values as of the merger date. Any changes in the estimated fair values based on new information about facts that existed at the merger date will be recognized in the period the adjustment is identified.

The following information was filed by Lcnb Corp (LCNB) on Tuesday, January 29, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Lcnb Corp's 10-K Annual Report:

Financial - Income Highlight
Service charges and fees on deposit accounts increased during 2018 primarily due to fees earned from an Insured Cash Sweep (ICS) product that was introduced during the second quarter 2017 and from an increase in debit card income.

Financial - Shares Highlight
The plan provided for the issuance of up to 200,000 shares, as restated for a stock dividend.
Other - Other Highlight
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on LCNB's and the Bank's financial statements.
Financial - Shares Highlight
On November 14, 2005, the Board of Directors extended the Market Repurchase Program by increasing the shares authorized for repurchase to 400,000 total shares, as restated for a stock dividend.
Financial - Shares Highlight
Under the Market Repurchase Program, LCNB was originally authorized to purchase up to 200,000 shares of its stock, as restated for a 100% stock dividend issued in May, 2007, through market transactions with a selected stockbroker.
Financial - Income
Debit card income benefited from...Read more
Financial - Expense
The increase in total interest...Read more
Financial - Income
The increase in total interest...Read more
Financial - Cash Flow
Effective liquidity management ensures that...Read more
Other - Other
Short-term borrowings increased due to...Read more
Financial - Expense
Non-Interest Expense A comparison of...Read more
Financial - Income
Partially offsetting the increase in...Read more
Financial - Income
Partially offsetting the increase in...Read more
Financial - Income
Fiduciary income increased during 2017...Read more
Financial - Debt
One of the reasons for...Read more
M & A - Other
Subsequent to the date of...Read more
Other - Other
Interest paid on savings deposits...Read more
Financial - Income
Interest income from non-taxable investment...Read more
Revenue - Product
Under this system, a depository...Read more
Financial - Cash Flow
For such loans an allowance...Read more
Financial - Earnings
The following table presents, for...Read more
Other - Other
No mortality benefits were received...Read more
Financial - Expense
Other real estate owned expense...Read more
Financial - Income
Bank owned life insurance income...Read more
Other - Other
Of the remaining net decrease,...Read more
Other - Other
The first three ratios, which...Read more
M & A - Other
LCNB?s intangible assets at December...Read more
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An increase in the expected...Read more
Financial - Income
Non-Interest Income A comparison of...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Lcnb Corp provided additional information to their SEC Filing as exhibits

Exhibit 14.1: Code Of Ethics

Exhibit 21: Subsidaries Of The Registrant

Exhibit 23: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32: Section 1350 Certification

Ticker: LCNB
CIK: 1074902
Form Type: 10-K Annual Report
Accession Number: 0001074902-19-000028
Submitted to the SEC: Wed Mar 06 2019 12:23:40 PM EST
Accepted by the SEC: Wed Mar 06 2019
Period: Monday, December 31, 2018
Industry: National Commercial Banks