LCNB Corp. ("LCNB") LCNB today announced net income of $4,627,000 (total basic and diluted earnings per share of $0.35) for the three months ended March 31, 2019. This compares to net income of $2,713,000 (total basic and diluted earnings per share of $0.27) for the same three month period in 2018.
Commenting on the financial results, LCNB Chief Executive Officer Steve Foster said, "We are pleased to report our financial results for the three months ended March 31, 2019. The acquisition of Columbus First Bancorp on May 31, 2018 had a positive effect on our loan balances and, consequently, on net interest income. Our average loan to deposit ratio for the first quarter 2018 was 76.25%, compared to 89.56% for the first quarter 2019. As a result, net interest income increased from $10,188,000 for the first quarter 2018 to $13,391,000 for the first quarter 2019."
Net interest income for the three months ended March 31, 2019 was $3,203,000 greater than the comparable period in 2018, 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 Bancorp ("CFB") were a considerable component of LCNB's loan portfolio growth and the increases in deposits and long-term borrowings.
The provision for loan losses for the three months ended March 31, 2019 was $184,000 less than the comparable period in 2018. Non-accrual loans and loans past due 90 days or more and still accruing interest decreased $78,000, from $3,100,000 or 0.26% of total loans at December 31, 2018 to $3,022,000 or 0.25% of total loans at March 31, 2019.
Non-interest income for the three months ended March 31, 2019 was $136,000 greater than the comparable period in 2018 primarily due to increases in fiduciary income and market-driven increases in the fair value of equity security investments, slightly offset by a decrease in net gains from sales of debt security investments.
Non-interest expense for the three months ended March 31, 2019 was $1,151,000 greater than the comparable period in 2018 primarily due to increases in salaries and employee benefits, state financial institutions tax, marketing, amortization of intangibles, and contracted services expenses. Salaries and employee benefits increased primarily due to salary and wage increases and newly hired employees, including CFB employees retained. State financial institutions tax expense increased due to a larger capital base (Ohio financial institutions tax is based on capital, not income), largely caused by stock issued to CFB stockholders as merger consideration. Marketing expense increased primarily due to promotion costs for new checking products introduced in 2018, increased marketing activities in the Columbus area, and expanded use of broadcast and digital media. Amortization of intangibles increased due to amortization of CFB's core deposit intangible. A decrease in merger related expenses partially offset these increases.
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, 2018, 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;
2. LCNB's ability to
integrate recent and future acquisitions, including the merger with CFB,
may be unsuccessful, or may be more difficult, time-consuming or costly
than expected;
3. LCNB may incur increased
charge-offs in the future;
4. LCNB may face
competitive loss of customers;
5. 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;
6. changes in general economic
conditions and increased competition could adversely affect LCNB's
operating results;
7. changes in other regulations
and government policies affecting bank holding companies and their
subsidiaries, including changes in monetary policies, could negatively
impact LCNB's operating results;
8. LCNB may
experience difficulties growing loan and deposit balances;
9.
the current economic environment poses significant challenges for us
and could adversely affect LCNB's financial condition and results
of operations;
10. 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;
11. 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; and
12.
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 "Dodd-Frank 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 | ||||||||||||||||
3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | ||||||||||||
Condensed Income Statement |
||||||||||||||||
Interest income | $ | 16,113 | 15,844 | 15,070 | 12,538 | 11,142 | ||||||||||
Interest expense | 2,722 | 2,334 | 1,967 | 1,170 | 954 | |||||||||||
Net interest income | 13,391 | 13,510 | 13,103 | 11,368 | 10,188 | |||||||||||
Provision for loan losses | (105 | ) | (39 | ) | 659 | 224 | 79 | |||||||||
Net interest income after provision | 13,496 | 13,549 | 12,444 | 11,144 | 10,109 | |||||||||||
Non-interest income | 2,772 | 2,702 | 2,921 | 2,791 | 2,636 | |||||||||||
Non-interest expense | 10,700 | 9,925 | 10,317 | 10,711 | 9,549 | |||||||||||
Income before income taxes | 5,568 | 6,326 | 5,048 | 3,224 | 3,196 | |||||||||||
Provision for income taxes | 941 | 1,133 | 847 | 486 | 483 | |||||||||||
Net income | $ | 4,627 | 5,193 | 4,201 | 2,738 | 2,713 | ||||||||||
Amort/Accret income on acquired loans | $ | 224 | 229 | 198 | 44 | 96 | ||||||||||
Amort/Accret expenses on acquired interest-bearing liabilities | $ | 144 | 149 | 214 | — | — | ||||||||||
Tax-equivalent net interest income | $ | 13,536 | 13,680 | 13,279 | 11,549 | 10,375 | ||||||||||
Per Share Data |
||||||||||||||||
Dividends per share | $ | 0.17 | 0.17 | 0.16 | 0.16 | 0.16 | ||||||||||
Basic earnings per common share | $ | 0.35 | 0.40 | 0.32 | 0.25 | 0.27 | ||||||||||
Diluted earnings per common share | $ | 0.35 | 0.40 | 0.32 | 0.25 | 0.27 | ||||||||||
Book value per share | $ | 16.83 | 16.47 | 16.05 | 15.97 | 14.80 | ||||||||||
Tangible book value per share | $ | 12.05 | 11.67 | 11.23 | 11.14 | 11.47 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 13,283,634 | 13,285,386 | 13,285,203 | 11,099,485 | 10,020,611 | |||||||||||
Diluted | 13,287,338 | 13,290,499 | 13,290,665 | 11,105,014 | 10,028,588 | |||||||||||
Shares outstanding at period end | 13,314,148 | 13,295,276 | 13,304,976 | 13,299,235 | 10,041,152 | |||||||||||
Selected Financial Ratios |
||||||||||||||||
Return on average assets | 1.15 | % | 1.27 | % | 1.03 | % | 0.78 | % | 0.85 | % | ||||||
Return on average equity | 8.47 | % | 9.55 | % | 7.76 | % | 6.46 | % | 7.33 | % | ||||||
Dividend payout ratio | 48.57 | % | 42.50 | % | 50.00 | % | 64.00 | % | 59.26 | % | ||||||
Net interest margin (tax equivalent) | 3.71 | % | 3.69 | % | 3.59 | % | 3.63 | % | 3.59 | % | ||||||
Efficiency ratio (tax equivalent) | 65.61 | % | 60.58 | % | 63.69 | % | 74.69 | % | 73.39 | % | ||||||
Selected Balance Sheet Items |
||||||||||||||||
Cash and cash equivalents | $ | 19,527 | 20,040 | 19,812 | 24,901 | 17,494 | ||||||||||
Debt and equity securities | 264,559 | 282,813 | 299,786 | 311,047 | 310,009 | |||||||||||
Loans: | ||||||||||||||||
Commercial and industrial | $ | 79,725 | 77,740 | 78,002 | 81,778 | 37,118 | ||||||||||
Commercial, secured by real estate | 764,424 | 740,647 | 704,987 | 705,978 | 542,890 | |||||||||||
Residential real estate | 334,227 | 349,127 | 347,920 | 339,435 | 246,487 | |||||||||||
Consumer | 17,409 | 17,283 | 17,505 | 17,705 | 17,176 | |||||||||||
Agricultural | 10,900 | 13,297 | 13,280 | 13,390 | 12,217 | |||||||||||
Other, including deposit overdrafts | 409 | 450 | 498 | 583 | 506 | |||||||||||
Deferred net origination costs | 40 | 79 | 133 | 229 | 263 | |||||||||||
Loans, gross | 1,207,134 | 1,198,623 | 1,162,325 | 1,159,098 | 856,657 | |||||||||||
Less allowance for loan losses | 4,126 | 4,046 | 4,016 | 3,603 | 3,529 | |||||||||||
Loans, net | $ | 1,203,008 | 1,194,577 | 1,158,309 | 1,155,495 | 853,128 | ||||||||||
Total earning assets | $ | 1,476,862 | 1,483,166 | 1,465,787 | 1,471,923 | 1,171,447 | ||||||||||
Total assets | 1,632,387 | 1,636,927 | 1,620,299 | 1,631,442 | 1,288,791 | |||||||||||
Total deposits | 1,347,857 | 1,300,919 | 1,371,023 | 1,380,884 | 1,123,463 | |||||||||||
Three Months Ended | ||||||||||||||||
3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | ||||||||||||
Selected Balance Sheet Items, continued |
||||||||||||||||
Short-term borrowings | 0 | 56,230 | 0 | 0 | 0 | |||||||||||
Long-term debt | 42,982 | 47,032 | 23,079 | 27,085 | 6,219 | |||||||||||
Total shareholders' equity | 224,018 | 218,985 | 213,515 | 212,366 | 148,584 | |||||||||||
Equity to assets ratio | 13.72 | % | 13.38 | % | 13.18 | % | 13.02 | % | 11.53 | % | ||||||
Loans to deposits ratio | 89.56 | % | 92.14 | % | 84.78 | % | 83.94 | % | 76.25 | % | ||||||
Tangible common equity (TCE) | $ | 160,488 | 155,197 | 149,398 | 147,705 | 114,801 | ||||||||||
Tangible common assets (TCA) | 1,568,857 | 1,573,139 | 1,556,182 | 1,566,781 | 1,255,008 | |||||||||||
TCE/TCA | 10.23 | % | 9.87 | % | 9.60 | % | 9.43 | % | 9.15 | % | ||||||
Selected Average Balance Sheet Items |
||||||||||||||||
Cash and cash equivalents | $ | 25,080 | 20,685 | 25,920 | 27,319 | 21,820 | ||||||||||
Debt and equity securities | 266,081 | 291,433 | 304,112 | 306,366 | 313,689 | |||||||||||
Loans | $ | 1,208,809 | 1,177,061 | 1,155,846 | 961,726 | 853,152 | ||||||||||
Less allowance for loan losses | 4,074 | 4,016 | 3,622 | 4,245 | 3,401 | |||||||||||
Net loans | $ | 1,204,735 | 1,173,045 | 1,152,224 | 957,481 | 849,751 | ||||||||||
Total earning assets | $ | 1,480,634 | 1,471,650 | 1,465,510 | 1,276,176 | 1,170,708 | ||||||||||
Total assets | 1,635,416 | 1,626,029 | 1,623,016 | 1,409,698 | 1,292,375 | |||||||||||
Total deposits | 1,333,529 | 1,333,673 | 1,367,950 | 1,212,104 | 1,114,979 | |||||||||||
Short-term borrowings | 23,235 | 36,348 | 1,833 | 3,491 | 14,086 | |||||||||||
Long-term debt | 44,676 | 25,536 | 25,757 | 13,252 | 2,255 | |||||||||||
Total shareholders' equity | 221,470 | 215,739 | 214,769 | 170,077 | 150,058 | |||||||||||
Equity to assets ratio | 13.54 | % | 13.27 | % | 13.23 | % | 12.06 | % | 11.61 | % | ||||||
Loans to deposits ratio | 90.65 | % | 88.26 | % | 84.49 | % | 79.34 | % | 76.52 | % | ||||||
Asset Quality |
||||||||||||||||
Net charge-offs (recoveries) | $ | (185 | ) | (68 | ) | 245 | 150 | (47 | ) | |||||||
Other real estate owned | 244 | 244 | 35 | 35 | — | |||||||||||
Non-accrual loans | 2,845 | 2,951 | 2,603 | 4,065 | 2,744 | |||||||||||
Loans past due 90 days or more and still accruing | 177 | 149 | 1 | 5 | 146 | |||||||||||
Total nonperforming loans | $ | 3,022 | 3,100 | 2,604 | 4,070 | 2,890 | ||||||||||
Net charge-offs (recoveries) to average loans | (0.06 | )% | (0.02 | )% | 0.08 | % | 0.06 | % | (0.02 | )% | ||||||
Allowance for loan losses to total loans | 0.34 | % | 0.34 | % | 0.35 | % | 0.31 | % | 0.41 | % | ||||||
Nonperforming loans to total loans | 0.25 | % | 0.26 | % | 0.22 | % | 0.35 | % | 0.34 | % | ||||||
Nonperforming assets to total assets | 0.20 | % | 0.20 | % | 0.16 | % | 0.25 | % | 0.22 | % | ||||||
Assets Under Management |
||||||||||||||||
LCNB Corp. total assets | $ | 1,632,387 | 1,636,927 | 1,620,299 | 1,631,442 | 1,288,791 | ||||||||||
Trust and investments (fair value) | 367,649 | 337,549 | 386,582 | 370,587 | 359,766 | |||||||||||
Mortgage loans serviced | 89,049 | 97,685 | 115,647 | 114,536 | 90,630 | |||||||||||
Cash management | 55,981 | 48,906 | 36,502 | 48,369 | 72,372 | |||||||||||
Brokerage accounts (fair value) | 245,758 | 233,751 | 247,175 | 238,651 | 230,168 | |||||||||||
Total assets managed | $ | 2,390,824 | 2,354,818 | 2,406,205 | 2,403,585 | 2,041,727 | ||||||||||
Non-GAAP Financial Measures |
||||||||||||||||
Net income | $ | 4,627 | 5,193 | 4,201 | 2,738 | 2,713 | ||||||||||
Add: merger-related expenses, net of tax | 53 | 148 | 274 | 710 | 621 | |||||||||||
Adjusted net income | $ | 4,680 | 5,341 | 4,475 | 3,448 | 3,334 | ||||||||||
Basic adjusted earnings per share | 0.36 | 0.41 | 0.34 | 0.31 | 0.33 | |||||||||||
Diluted adjusted earnings per share | 0.36 | 0.41 | 0.34 | 0.31 | 0.33 | |||||||||||
Adjusted return on average assets | 1.16 | % | 1.30 | % | 1.09 | % | 0.98 | % | 1.05 | % | ||||||
Adjusted return on average equity | 8.57 | % | 9.82 | % | 8.27 | % | 8.13 | % | 9.01 | % | ||||||
LCNB CORP. AND SUBSIDIARIES | |||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | |||||||
(Dollars in thousands) | |||||||
March 31, |
December 31, |
||||||
ASSETS: | |||||||
Cash and due from banks | $ | 14,358 | 18,310 | ||||
Interest-bearing demand deposits | 5,169 | 1,730 | |||||
Total cash and cash equivalents | 19,527 | 20,040 | |||||
Interest-bearing time deposits | 747 | 996 | |||||
Investment securities: | |||||||
Equity securities with a readily determinable fair value, at fair value | 2,185 | 2,078 | |||||
Equity securities without a readily determinable fair value, at cost | 2,099 | 2,099 | |||||
Debt securities, available-for-sale, at fair value | 217,668 | 238,421 | |||||
Debt securities, held-to-maturity, at cost | 32,363 | 29,721 | |||||
Federal Reserve Bank stock, at cost | 4,652 | 4,653 | |||||
Federal Home Loan Bank stock, at cost | 4,845 | 4,845 | |||||
Loans, net | 1,203,008 | 1,194,577 | |||||
Premises and equipment, net | 32,548 | 32,627 | |||||
Operating leases right of use asset | 5,348 | — | |||||
Goodwill | 59,221 | 59,221 | |||||
Core deposit and other intangibles | 4,760 | 5,042 | |||||
Bank owned life insurance | 28,905 | 28,723 | |||||
Other assets | 14,511 | 13,884 | |||||
TOTAL ASSETS |
$ | 1,632,387 | 1,636,927 | ||||
LIABILITIES: | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 330,324 | 322,571 | ||||
Interest-bearing | 1,017,533 | 978,348 | |||||
Total deposits | 1,347,857 | 1,300,919 | |||||
Short-term borrowings | — | 56,230 | |||||
Long-term debt | 42,982 | 47,032 | |||||
Operating leases liability | 5,289 | — | |||||
Accrued interest and other liabilities | 12,241 | 13,761 | |||||
TOTAL LIABILITIES | 1,408,369 | 1,417,942 | |||||
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, 2019 and December 31, 2018; issued 14,089,175 and 14,070,303 shares at March 31, 2019 and December 31, 2018, respectively | 141,349 | 141,170 | |||||
Retained earnings | 96,912 | 94,547 | |||||
Treasury shares at cost, 775,027 at March 31, 2019 and December 31, 2018 | (12,013 | ) | (12,013 | ) | |||
Accumulated other comprehensive loss, net of taxes | (2,230 | ) | (4,719 | ) | |||
TOTAL SHAREHOLDERS' EQUITY | 224,018 | 218,985 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,632,387 | 1,636,927 | ||||
LCNB CORP. AND SUBSIDIARIES | ||||||
CONSOLIDATED CONDENSED STATEMENTS OF INCOME | ||||||
(Dollars in thousands, except per share data) | ||||||
(Unaudited) | ||||||
Three Months Ended March 31, |
||||||
2019 | 2018 | |||||
INTEREST INCOME: | ||||||
Interest and fees on loans | $ | 14,538 | 9,413 | |||
Dividends on equity securities with a readily determinable fair value | 17 | 15 | ||||
Dividends on equity securities without a readily determinable fair value | 16 | 7 | ||||
Interest on debt securities, taxable | 869 | 931 | ||||
Interest on debt securities, non-taxable | 544 | 704 | ||||
Other short-term investments | 129 | 72 | ||||
TOTAL INTEREST INCOME | 16,113 | 11,142 | ||||
INTEREST EXPENSE: | ||||||
Interest on deposits | 2,286 | 871 | ||||
Interest on short-term borrowings | 219 | 69 | ||||
Interest on long-term debt | 217 | 14 | ||||
TOTAL INTEREST EXPENSE | 2,722 | 954 | ||||
NET INTEREST INCOME | 13,391 | 10,188 | ||||
PROVISION FOR LOAN LOSSES | (105 | ) | 79 | |||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 13,496 | 10,109 | ||||
NON-INTEREST INCOME: | ||||||
Fiduciary income | 1,034 | 964 | ||||
Service charges and fees on deposit accounts | 1,308 | 1,305 | ||||
Net gains (losses) on sales of debt securities | (18 | ) | — | |||
Bank owned life insurance income | 182 | 186 | ||||
Gains from sales of loans | 29 | 22 | ||||
Other operating income | 237 | 159 | ||||
TOTAL NON-INTEREST INCOME | 2,772 | 2,636 | ||||
NON-INTEREST EXPENSE: | ||||||
Salaries and employee benefits | 6,162 | 4,977 | ||||
Equipment expenses | 266 | 253 | ||||
Occupancy expense, net | 763 | 727 | ||||
State financial institutions tax | 438 | 303 | ||||
Marketing | 302 | 132 | ||||
Amortization of intangibles | 257 | 185 | ||||
FDIC insurance premiums | 126 | 99 | ||||
Contracted services | 464 | 315 | ||||
Other real estate owned | 3 | 2 | ||||
Merger-related expenses | 67 | 758 | ||||
Other non-interest expense | 1,852 | 1,798 | ||||
TOTAL NON-INTEREST EXPENSE | 10,700 | 9,549 | ||||
INCOME BEFORE INCOME TAXES | 5,568 | 3,196 | ||||
PROVISION FOR INCOME TAXES | 941 | 483 | ||||
NET INCOME | $ | 4,627 | 2,713 | |||
Dividends declared per common share | $ | 0.17 | 0.16 | |||
Earnings per common share: | ||||||
Basic | 0.35 | 0.27 | ||||
Diluted | 0.35 | 0.27 | ||||
Weighted average common shares outstanding: | ||||||
Basic | 13,283,634 | 10,020,611 | ||||
Diluted | 13,287,338 | 10,028,588 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190418005753/en/
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