In Today’s Economy,
This is a Good Sign
2010 Annual Report
Letter To Our Shareholders
Dear Shareholders:
A struggling economy, increased banking
regulation, and higher FDIC premiums have
made it difficult for some
U.S. banks to deliver good
results in 2010. LCNB is
happy to report that, in
spite of those challenges,
2010 was another very
successful year and we are
proud to present these
results in this year’s an-
nual report.
Steve Wilson
The theme of this year’s
annual report is, “If LCNB
is in your Community...
This is a Good Sign.” This refers directly to the
importance of a bank to the economic health of
any community. A traditional regulated bank,
whose success is tied to the success of its cus-
tomers and its community is so very important
for several reasons. A community bank is the
economic engine that enables its customers to
create jobs and to create wealth and opportu-
nity. It renders advice on how fast to grow and
how far to go to ensure that customers are suc-
cessful in the long-run. The bank’s value to the
community itself goes beyond economic value
and provides the power of involvement and sup-
port. Support is given by investing time and
money in many organizations and events which
contribute to the quality of life in a community.
It also supports those things, both necessary and
nice, that differentiates a community and makes
it a great place to live.
A successful year is measured in numerous
ways. We measure it financially and with the
completion of successful projects within the
organization.
Steve Foster
Financially, LCNB earned
a return on average assets
of 1.22% and a return on
average equity of 13.36%
in 2010. Net income avail-
able to common share-
holders in 2010 exceeded
2009 results by 41% result-
ing in net income available
to common shareholders
of $9.4 million. That net
income produced total
earnings per share of $1.40
which is 40% higher than the $1.00 earnings
per share from 2009 results. Although LCNB
Corp. total assets grew from $734 million to
$760 million in 2010, loan growth was still slug-
gish in 2010. Net loans declined 1.11% from
2009 to $452 million. But within that total,
commercial loans grew by almost 2% and we
have originated or refinanced $19 million in 1-4
family mortgages for consumers taking advan-
tage of the low interest rate environment in
2010. Another $24 million of 1-4 family mort-
gages were originated and sold in the secondary
market during 2010. The Trust and Brokerage
Departments both had 14% growth in assets
they manage for our customers and deposits
continued to grow in 2010 to $639 million. Total
shareholder’s equity on December 31, 2010 was
$70.7 million. Our capital remains in the “well
capitalized” designation.
A N N U A L R E P O R T 2 0 1 0
1
a g o o d s i g n
Letter To Our Shareholders
LCNB Management and the Board of Directors
believe continuing to pay a dividend to our
shareholders is important. During 2010 our
shareholders received a dividend of $.64 per
share. LCNB returned earnings to its sharehold-
ers of 46% in 2010.
In addition to the successful year financially, our
employees also were busy improving delivery
channels for our customers. We started upgrad-
ing our ATM machines to newer models in 2010
and this project will continue in 2011. Because
of the constant threat of dishonest people trying
to exploit our electronic delivery channels, we
have added additional firewalls and other more
secure ways that our customers can access their
bank information and transact business elec-
tronically. We will always strive to maintain the
latest security measures to protect our custom-
ers’ information. Although we did not build or
acquire any new facilities in 2010, we began con-
struction of a new branch in the City of Monroe
and the new Auto Bank in Lebanon. Both proj-
ects should be complete by late Spring of 2011.
In November, Dave Beckett, a director of LCNB
since 1999 and President of Dakin Insurance
Agency, a subsidiary of LCNB Corp., announced
that he and his family planned to relocate to an-
other state. We are sorry to lose Dave as a direc-
tor and as president of Dakin Insurance. He has
very competently fulfilled both roles. The LCNB
Board of Directors decided not to fill the vacant
director’s seat at this time. In addition, the
LCNB Board of Directors decided to divest of
Dakin Insurance by selling the agency.
Continued
Additional statistical data and information on
our financial performance for 2010 is available
in the LCNB Corp. Annual Report on Form
10-K. This report is filed annually with the Se-
curities and Exchange Commission. We have
enclosed the Form 10-K with the initial mailing
of this report to shareholders and it is available
upon request or from the shareholders informa-
tion section on our website, www.LCNB.com.
The Annual Meeting for LCNB Corp. will be
Tuesday, April 26th, 2011 at 10:00 a.m. at our
Main Office located at 2 North Broadway in
Lebanon, Ohio. Proxy material is included with
this initial mailing. Please review, sign and re-
turn the proxy in the envelope provided. We
would be pleased to have you attend our annual
meeting in person. Thank you for your contin-
ued support.
Stephen P. Wilson
Chairman and CEO
Steve P. Foster
President
Please Note: “In the spirit of service to our com-
munities and profession, Steve Wilson continues to
demonstrate his dedication to the banking industry.
He served as chairman of the Ohio Bankers League
(OBL) in 1997 and, beginning in October 2010,
Steve is serving as Chairman of the American Bank-
ers Association (ABA).
It is a prestigious honor that Steve has been given to
represent our banking industry and his leadership
and experience is important to banking at this cru-
cial time.” – Steve P. Foster
A N N U A L R E P O R T 2 0 1 0
2
a g o o d s i g n
Board of Directors
Stephen P. Wilson
Chairman of the Board
Chief Executive Officer
Kathleen Porter
Stolle
Attorney
William H. Kaufman
Attorney
Spencer S. Cropper
Certified Public Accountant
Stolle Properties, Inc.
David S. Beckett
President
Dakin Insurance Agency, Inc.
Anne E. Krehbiel
Attorney
George L. Leasure
President
Ghent Manufacturing, Inc.
Rick L. Blossom
Managing Partner
Reality Check, LLC
Steve P. Foster
President
Stephen P. Wilson
Chairman of the Board
Chief Executive Officer
Kathleen Porter Stolle
Attorney
George L. Leasure
President,
Ghent Manufacturing, Inc.
William H. Kaufman
Attorney
Spencer S. Cropper
Certified Public Accountant,
Stolle Properties, Inc.
David S. Beckett
President,
Dakin Insurance Agency, Inc.
Anne E. Krehbiel
Attorney
Rick L. Blossom
Managing Partner,
Reality Check, LLC
Steve P. Foster
President
Stephen P. Wilson
Chaiman of the Board,
CEO – LCNB
David S. Beckett
President
Donald L. Beckett
Retired President,
Dakin Insurance Agency, Inc.
Vincent B. Fullan
Vice President
Phillip R. Hines
Vice President
John C. George
President,
George Steel Fabricating, Inc.
Steve P. Foster
President,
LCNB
D.J. Benjamin Jackson
Sr. Executive Vice President,
LCNB
Bernard H. Wright, Jr.
Sr. Executive Vice President
& Trust Officer, LCNB
A N N U A L R E P O R T 2 0 1 0
3
a g o o d s i g n
In Today’s Economy,
This is a Good Sign.
LCNB National Bank’s history is deeply rooted in the soil of
supporting memorable Hometown events. The Bank was founded in
Lebanon over 134 years ago in what was then a rural farming com-
munity. These events or gatherings were the only times during the
year that its hardworking residents could come together to socialize
and celebrate the community.
The Bank believes that sponsoring these events is important in any
economy. They show first-hand the economic health of the commu-
nity. They also build traditions with families, friends and neighbors.
It seems as if the entire community was there—smiling, laughing
and working side by side. And they were. Just about everyone was
there—including LCNB National Bank and our employees.
business, wealth building, investing for retirement and much,
much more.
As the community’s “economic engine,” the Bank must also serve
local public institutions and governments, as only a local bank can.
And during a difficult economy, LCNB is trusted to find unique so-
lutions that keep the community moving forward, responsibly. The
Bank accomplishes this by buying local bonds and investing in mort-
gage securities. These financial instruments directly help our local
governments, schools and also encourage home ownership.
While we offer the financial tools and unique solutions to stimulate
the local economy, the Bank also provides a strong, local and secure
place for our customers to grow and safeguard their money. This is a
philosophy we were founded upon and it serves us well today in light
of the continued turmoil facing the financial markets.
Being a supporter of these tradition-rich events is only one of
the Bank’s responsibilities to the communities it serves. Our
primary role is to serve as the “economic engine” that stimu-
lates the local economy. LCNB
accomplishes this by offering the financial tools that our
customers can use to achieve their own personal goals
of success. These goals are different for everyone. They
may include home ownership, starting or expanding a
In the Spring of this year, we will be opening our 26th office in the hometown community of Monroe.
When this new LCNB office is built, and the big ‘green and white’ sign is turned on, everyone will know
This is a Good Sign—a sign of prosperity and success. . . backed by a lot of tradition.
LCNB is a community bank. We
are dedicated to the success of our customers, communities,
shareholders and employees. Their success is our success.
That says it all! We believe that the 20 citizens who founded
LCNB in 1877 would be very proud of the Bank in 2011.
4
5
LCNB Officers
Name
Years
with
LCNB Title
Years of
Related
Experience
Name
Years
with
LCNB Title
Years of
Related
Experience
Chairman & CEO 39
Amy L. Butler
19 Assistant VP
Stephen P. Wilson
Steve P. Foster
36
34
President
D.J. Benjamin Jackson 37
Sr. Executive VP
Bernard H. Wright, Jr. 33
Sr. Executive VP
Robert C. Haines, II
Matthew P. Layer
Leroy F. McKay
Eric J. Meilstrup
Kenneth R. Layer
Timothy J. Sheridan
Ann M. Smith
Stephen P. Anglin
Brian N. Bausmith
19
28
15
23
28
21
24
10
24
Executive VP
Executive VP
Executive VP
Executive VP
Senior VP
Senior VP
Senior VP
Vice President
Vice President
Harry E. Campbell, Jr. 34
Vice President
P. Stanley Castleman
Kelly Haworth
Kimberli R. Layer
Ralph D. Mattingly
Dan H. Nielsen
Rebecca H. Roess
John Rost
Bradley A. Ruppert
Nathan Sachritz
Lonnie D. Schear
Connie A. Sears
Pauletta I. Sears
Deborah G. Stevens
David R. Theiss
Melanie K. Crane
S. Diane Ingram
5
2
21
32
3
2
4
3
2
13
8
22
9
12
25
19
Vice President
Vice President
Vice President
Vice President
Vice President
VP/ Trust Officer
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Trust Officer
Trust Officer
Randy Bernhardt
4 Assistant VP
Peter G. Berninger
6 Assistant VP
37
42
36
19
28
25
23
28
34
24
32
24
34
22
30
21
39
34
12
28
12
31
37
23
39
34
32
25
19
26
28
William E. Childers
12 Assistant VP
Karen M. Cramer
23 Assistant VP
Jeffrey L. Davis
12 Assistant VP
Lisa E. Emmel
5 Assistant VP
Ed Hale
2 Assistant VP
Patricia S. Hogan
20 Assistant VP
Sherry L. Jackson
16 Assistant VP
Kimberly J. Johnson
30 Assistant VP
Steven C. Lautenslager 21 Assistant VP
Michael Lavatori
8 Assistant VP
Teresa A. McCurley
22 Assistant VP
Roger P. Mersch
5 Assistant VP
Patricia D. Mitchell
32 Assistant VP
Judith Neiheisel
4 Assistant VP
Beverly K. Taylor
34 Assistant VP
John L. Torbeck
1 Assistant VP
John E. Wetzig, III
22 Assistant VP
19
15
23
12
21
36
20
16
32
21
22
22
27
32
28
34
25
22
Karen A. Day
16 Assistant Cashier 16
Christina L. Harris
15 Assistant Cashier 15
Terry J. Howard
21 Assistant Cashier 21
Kimberly B. Isaacs
15 Assistant Cashier 15
Mary Lynn Johnson
24 Assistant Cashier 24
M. Teresa Jenkins
7 Assistant Cashier 37
Annie S. Joseph
5 Assistant Cashier 13
Tammy S. Murray
11 Assistant Cashier 12
Patricia Q. Partch
7 Assistant Cashier 25
Simone Payne
7 Assistant Cashier
7
Steven Pomeroy
3 Assistant Cashier 27
Janet M. Preston
15 Assistant Cashier 25
Lenora Schoultheis
13 Assistant Cashier 40
Rhonda G. Wetzig
18 Assistant Cashier 18
A N N U A L R E P O R T 2 0 1 0
6
a g o o d s i g n
Financial Highlights
(Dollars in thousands, except per share data)
For the Years Ended December 31,
Income Statement
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income from continuing operations . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations, net of tax . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income available to common shareholders. . . . . . . . . . . . . . . .
Dividends declared per common share(1). . . . . . . . . . . . . . . . . . . . .
Basic earnings per common share(1):
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per common share(1):
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheet
Loans – net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earning assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Per common share:
Book value at year end(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Ratios
Return on average assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Return on average shareholders’ equity. . . . . . . . . . . . . . . . . . . . . .
2010
$ 25,655
9,133
240
9,373
9,373
0.64
1.37
0.03
1.36
0.03
$ 452,350
706,226
760,134
638,539
21,691
23,120
70,707
2009
24,793
7,687
79
7,766
6,658
0.64
0.99
0.01
0.98
0.01
457,418
678,055
734,409
624,179
14,265
24,960
65,615
2008
20,928
6,427
176
6,603
6,603
0.64
0.96
0.03
0.96
0.03
451,343
599,825
649,731
577,622
2,206
5,000
58,116
2007
18,152
5,737
217
5,954
5,954
0.62
0.90
0.04
0.90
0.04
444,419
550,733
604,058
535,929
1,459
5,000
56,528
2006
18,315
6,182
332
6,514
6,514
0.60
0.95
0.05
0.95
0.05
388,320
505,485
548,215
478,615
15,370
–
50,999
10.57
9.81
8.69
8.45
7.99
1.22%
13.36%
1.07%
10.43%
1.03%
11.35%
1.08%
11.41%
1.19%
12.48%
(1)All per share data have been adjusted to reflect a 100% stock dividend accounted for as a stock split in 2007.
Condensed Consolidated Balance Sheets
At December 31, (Dollars in thousands)
ASSETS:
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing demand deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities:
Available-for-sale, at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Held-to-maturity, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Reserve Bank stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Home Loan Bank stock, at cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank owned life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010
$ 10,817
182
10,999
235,882
12,141
939
2,091
452,350
16,017
5,915
14,242
9,558
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 760,134
LIABILITIES:
Deposits:
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 7,445,514 at Dec. 31, 2010 and 2009 . .
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury shares at cost, 755,771 shares and 758,282 shares at December 31, 2010 and 2009, respectively. . .
Accumulated other comprehensive income, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL SHAREHOLDERS’ EQUITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 98,994
539,545
638,539
21,691
23,120
6,077
689,427
–
11,068
15,447
54,045
(11,698)
1,845
70,707
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 760,134
2009
12,626
–
12,626
201,578
13,030
940
2,091
457,418
15,722
5,915
14,122
10,967
734,409
93,894
530,285
624,179
14,265
24,960
5,390
668,794
–
11,068
15,407
48,962
(11,737)
1,915
65,615
734,409
A N N U A L R E P O R T 2 0 1 0
7
a g o o d s i g n
Condensed Consolidated Statements of Income
For the years ended December 31, (Dollars in thousands, except per share data)
INTEREST INCOME:
Interest and fees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on investment securities:
Taxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-taxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL INTEREST INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INTEREST EXPENSE:
Interest on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET INTEREST INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROVISION FOR LOAN LOSSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES . . . . . . . . . . . . . . . . . .
NON-INTEREST INCOME:
Trust income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service charges and fees on deposit accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net gain on sales of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank owned life insurance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains from sales of mortgage loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL NON-INTEREST INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NON-INTEREST EXPENSE:
Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State franchise tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FDIC premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ATM expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer maintenance and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telephone expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-off of pension asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL NON-INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROVISION FOR INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX . . . . . . . . . . . . . . . . . . . . . . . .
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PREFERRED STOCK DIVIDENDS AND DISCOUNT ACCRETION . . . . . . . . . . . . . . . . . . . . . .
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . .
Basic earnings per common share:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per common share:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010
$ 26,977
3,686
3,126
200
33,989
7,613
27
694
8,334
25,655
1,680
23,975
1,897
3,953
948
1,389
496
248
8,931
11,271
889
1,875
703
448
57
958
513
456
414
506
–
3,189
21,279
11,627
2,494
9,133
240
9,373
–
$ 9,373
$ 1.37
0.03
1.36
0.03
2009
27,493
4,237
2,921
202
34,853
9,434
3
623
10,060
24,793
1,400
23,393
1,916
3,985
110
637
396
204
7,248
10,534
995
1,721
610
408
57
1,271
513
449
407
17
722
3,005
20,709
9,932
2,245
7,687
79
7,766
1,108
6,658
0.99
0.01
0.98
0.01
2008
29,024
2,641
1,995
689
34,349
13,145
13
263
13,421
20,928
620
20,308
1,861
4,211
–
534
11
184
6,801
10,183
973
1,652
614
433
257
75
456
454
439
9
–
3,003
18,548
8,561
2,134
6,427
176
6,603
–
6,603
0.96
0.03
0.96
0.03
6,687,500
6,736,622
6,687,232
6,701,309
6,687,232
6,687,232
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
LCNB Corp. and subsidiaries
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated
balance sheets of LCNB Corp. and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of income,
and consolidated statements of comprehensive income, shareholders’ equity and cash flows (not included herein), for each of the three
years in the period ended December 31, 2010; and in our report dated March 1, 2011 we expressed an unqualified opinion on those
consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material
respects, in relation to the consolidated financial statements from which it has been derived.
Cincinnati, Ohio
March 1, 2011
A N N U A L R E P O R T 2 0 1 0
8
a g o o d s i g n