LCNB Corp
Annual Report 2014

Plain-text annual report

Letter To Our Shareholders Dear Shareholders: in the first quarter of 2014. Likewise, LCNB negotiated the purchase of Brookville The 2014 Annual Report showcases just a National Bank during the fourth quarter few of those men and women who served in of 2014 and we expect to close the transac- the Armed Forces since the Bank’s founding. Most of the individuals featured in our Annual Report are relatives of our LCNB employees, and several, in fact, are employees who served. LCNB employees under- stand the importance of serving the communities in which they live and work. It is a very impor- Steve Wilson Steve Foster tion in the first half of tion in the first half of 2015. Brookville National 2015. Brookville National Bank Bank (BNB) will add (BNB) will add two offices to our orga- two offices to our orga nization, increasing our nization, increasing our office total to 37 across office total to 37 across nine counties. Both BNB nine counties. Both BNB offices are located in the offices are located in the city of Brookville which city of Brookville which is west of Dayton, Ohio is west of Dayton, Ohio in Montgomery County. in Montgomery County. This purchase will comple- This purchase will comple ment last year’s addition ment last year’s addition tant part of being a community bank. They of the five Eaton National Bank offices located embrace this responsibility by volunteering west of Brookville in Preble County. BNB will with United Way, Relay for Life, the Chamber add approximately $110 million in assets to of Commerce, scouting, food pantries, and LCNB’s balance sheet making LCNB a $1.2 many more charitable and civic organiza- billion financial institution. tions such as Rotary, Optimists, Kiwanis, and Jaycees. It is this dedication to the Last year was another successful year for communities that we serve that makes LCNB LCNB. Strong earnings in 2014 allowed a community bank. That has been our philoso- LCNB to provide shareholders a dividend phy since 1877. payout ratio of just over 60%. The return on average assets (ROAA) was 0.88% and the As Yogi Berra said, “It’s déjà vu all over again”. return on average equity (ROAE) was 8.04% The year 2014 started much like the previous for 2014. LCNB’s earnings were affected by year began. LCNB negotiated the purchase one-time merger expenses of approximately of Eaton National Bank in the fourth $1.4 million on a pre-tax basis. If these tax- quarter of 2013 and closed the transaction effected merger expenses were not included, A N N U A L R E P O R T 2 0 1 4 1 L C N B C O R P. Letter To Our Shareholders Continued LCNB’s ROAA would have been 0.95% and the Columbus Avenue and Middletown branches ROAE would have been 8.67%. Net income during his tenure at LCNB. He is best remem- was $9.9 million, resulting in total basic earn- bered as a loan officer that had a very large ings per share of $1.06. Total shareholder’s and loyal customer base. Like Mr. Wilson, equity increased $6.8 million from December Dave helped LCNB successfully grow during 31, 2013 to December 31, 2014, an increase of his 45 years with the bank. Both gentlemen 5.74%. LCNB’s net interest margin improved will be missed as bankers and as strong citi- from 3.57% on December 31, 2013 to 3.66% zens of our community. on December 31, 2014. Additional statistical data and information on It is with great sadness that we report that our financial performance for 2014 is avail- Howard Wilson, former Chairman and CEO able in the LCNB Corp. Annual Report on of LCNB, passed away on January 4, 2015 and Form 10-K. This report is filed annually with Dave Witham, Vice President, passed away on the Securities and Exchange Commission. We February 21, 2015. have enclosed the Form 10-K with the initial mailing of this report to shareholders and it Mr. Wilson was named President of Lebanon is available upon request or from the share- Citizens National Bank in 1969 after joining holder information section on our website, the bank as Executive Vice President in www.LCNB.com or www.lcnbcorp.com. 1968. Mr. Wilson retired in 1992. During Mr. Wilson’s tenure the bank increased in total The Annual Meeting for LCNB Corp. will be assets by approximately $260 million and the Tuesday, April 28, 2015 at 10:00 a.m. at our bank started its branch expansion under Mr. Main Office located at 2 North Broadway in Wilson’s leadership. Howard Wilson, like so Lebanon, Ohio. Proxy material is included many represented in this Annual Report, was with this mailing. Please review, sign, and a Navy veteran of WWII and a great commu- return the proxy in the envelope provided. nity banker. We would be pleased to have you attend our annual meeting in person. Thank you for your Mr. Witham worked for LCNB for 45 years continued support. and retired from the bank in 2010. Dave, a native of Lebanon and a U.S. Air Force veteran who served in Vietnam, was well known in the community. Mr. Witham managed the Stephen P. Wilson Chairman and CEO Steve P. Foster President A N N U A L R E P O R T 2 0 1 4 2 L C N B C O R P. Board of Directors Stephen P. Wilson Chairman of the Board Chief Executive Officer Steve P. Foster Steve P. Foster Steve P. Foster President William H. Kaufman Attorney Spencer S. Cropper Certified Public Accountant Stolle Properties, Inc. Anne E. Krehbiel Attorney George L. Leasure President GMi Company Rick L. Blossom Managing Partner Reality Check, LLC John H. Kochensparger, III Retired Stephen P. Wilson Chairman of the Board Chief Executive Officer Steve P. Foster President George L. Leasure President, GMi Company William H. Kaufman Attorney Spencer S. Cropper Certified Public Accountant, Stolle Properties, Inc. Anne E. Krehbiel Attorney Rick L. Blossom Managing Partner, Reality Check, LLC John H. Kochensparger, III Retired A N N U A L R E P O R T 2 0 1 4 3 L C N B C O R P. LCNB Officers Name Years with LCNB Title Years of Related Experience Name Years with LCNB Title Years of Related Experience 40 Stephen P. Wilson 38 Steve P. Foster 23 Robert C. Haines, II 32 Matthew P. Layer 19 Leroy F. McKay 27 Eric J. Meilstrup 14 Stephen P. Anglin 28 Brian N. Bausmith 32 Kenneth R. Layer 8 John Rost 25 Timothy J. Sheridan 28 Ann M. Smith 10 Peter G. Berninger 1 David Bock 4 Gene G. Bonny 1 John Chartrand 1 Daniel Daughtery 1 Jeffery M. Doles 1 Deborah Fitzwater 2 Jodi Hart 6 Kelly Haworth 9 Annie S. Joseph Mark Kennard 3 Steven C. Lautenslager 25 12 Michael Lavatori 25 Kimberli R. Layer 2 Jeff Meeker 9 Roger P. Mersch 36 Patricia D. Mitchell 2 Lori Raines 6 Rebecca H. Roess 1 Scott Roman 7 Bradley A. Ruppert 6 Nathan Sachritz 17 Lonnie D. Schear 12 Connie A. Sears 13 Deborah G. Stevens 8 David A. Stitsinger 38 Beverly K. Taylor 26 John E. Wetzig, III 1 Frank Williams 2 Gregory Woods 29 Melanie K. Crane 1 Myra Frame 23 S. Diane Ingram 2 Jacqueline A. Manley 19 Christina L. Harris 24 Patricia S. Hogan 2 Ronda Holdren 1 Michele Kreitzer 11 Paula L. Lee A N N U A L R E P O R T 2 0 1 4 Chairman & CEO 43 41 President 23 Executive VP 32 Executive VP 29 Executive VP 27 Executive VP 36 Senior VP 28 Senior VP 32 Senior VP 32 Senior VP 38 Senior VP 28 Senior VP 32 Vice President 13 Vice President 9 Vice President 12 Vice President 36 Vice President 29 Vice President 22 Vice President 18 Vice President 34 Vice President 17 VP/Regional 11 Vice President 25 Vice President 26 Vice President 25 Vice President 31 Vice President 31 Vice President 36 Vice President 23 Vice President 16 VP/Trust Officer 11 Vice President 16 VP/Trust Officer 35 Vice President 41 Vice President 27 Vice President 38 Vice President 36 Vice President 38 Vice President 26 Vice President VP/Trust Officer 37 12 Vice President AVP/Trust Officer 29 AVP/Trust Officer 33 AVP/Trust Officer 23 8 AVP/Trust Officer 19 Regional AVP 24 Regional AVP 23 Regional AVP 26 Regional AVP 13 Regional AVP 26 Teresa A. McCurley 1 Amy Aldridge 8 Randy Bernhardt 2 Pam Bowles 1 Deborah Bradley 23 Amy L. Butler 16 William E. Childers 27 Karen M. Cramer 9 Lisa E. Emmel 1 Chris Fourman 12 Lisa A. Gibson 19 Kimberly B. Isaacs Sherry L. Jackson 20 Kimberly J. Johnson-Hall 34 8 Judith Neiheisel 2 Mark Pennington 1 Sara Sorrell 5 John L. Torbeck 1 Juli Troutman 4 Elizabeth G. Vogele 11 Simone Walter 22 Rhonda G. Wetzig 16 Jenny Bates 2 Ann Blackburn 14 Melissa M. Cordes 7 Clint Day 20 Karen A. Day 10 Chris Fisher 1 Amy Fouche 8 Jenny Giltrow 19 Traci Hammiel 25 Terry J. Howard 28 Mary Lynn Johnson 11 M. Teresa Jenkins 12 Veronica Keen 13 Ursula Keith 2 Phoebe Kerby 13 Amy R. Kobes 2 Jodi Lowrey 25 Michele McIntosh 14 Angela Otis 11 Patricia Q. Partch 19 Janet M. Preston 2 Tami Reisinger 9 Daren Roark 17 Tonya Scott 17 Betty Seibert 17 Lenora Schoultheis 7 Tyler Tepe 1 Ann Weadick 5 Sarah Wilson Regional AVP 26 Assistant VP 34 Assistant VP 30 Assistant VP 23 Assistant VP 33 Assistant VP 23 Assistant VP 19 Assistant VP 27 Assistant VP 25 Assistant VP 30 Assistant VP 24 Assistant VP 19 Assistant VP 20 Assistant VP 36 Assistant VP 32 Assistant VP 12 Assistant VP 3 Assistant VP 29 Assistant VP 14 Assistant VP 33 Assistant VP 11 22 Assistant VP Assistant IT Officer 16 27 Branch Officer Branch Officer 20 7 Loan Officer Assistant Cashier 20 IT Officer 12 Assistant Cashier 13 8 Assistant Cashier Asst. Trust Officer 19 Branch Officer 25 Assistant Cashier 28 41 Branch Officer 12 Branch Officer 17 Branch Officer Branch Officer 17 Asst. Trust Officer 13 19 Branch Officer Branch Officer 25 Assistant Cashier 14 29 Bus. Dev. Officer Assistant Cashier 29 11 Branch Officer Branch Officer 9 Assistant Cashier 17 25 Branch Officer 44 Branch Officer Loan Officer 7 Assistant Cashier 10 5 Assistant Cashier 6 L C N B C O R P. Financial Highlights 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends declared per common share . . . . . . . . . . . . . . . . . . . . . . . Basic earnings per common share: Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted earnings per common share: 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Performance Ratios Return on average assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on average shareholders’ equity. . . . . . . . . . . . . . . . . . . . . . . 2014 $ 35,887 9,869 — 9,869 0.64 1.06 — 1.05 — $ 695,835 1,014,640 1,108,066 946,205 16,645 11,357 125,695 (Dollars in thousands, except per share data) 2011 2013 2012 29,432 8,780 — 8,780 0.64 1.12 — 1.10 — 570,766 857,653 932,338 785,761 8,655 12,102 118,873 25,049 8,270 — 8,270 0.64 1.23 — 1.22 — 450,346 732,968 788,637 671,471 13,756 13,705 82,006 25,706 7,322 793 8,115 0.64 1.09 0.12 1.08 0.12 458,331 736,119 791,570 663,562 21,596 21,373 77,960 2010 25,697 9,133 240 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 13.50 12.80 12.18 11.63 10.57 0.88% 8.04% 0.93% 9.02% 1.02% 10.22% 1.02% 10.89% 1.22% 13.36% 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Core deposit and other intangibles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bank owned life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 $ 14,235 1,610 15,845 285,365 22,725 2,346 3,638 695,835 20,733 27,638 4,780 21,936 7,225 TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,108,066 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 10,064,945 and 10,041,163 shares at December 31, 2014 and 2013, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treasury shares at cost, 753,627 shares at December 31, 2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated other comprehensive income (loss), net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL SHAREHOLDERS’ EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 213,303 732,902 946,205 16,645 11,357 8,164 982,371 — 67,181 69,394 (11,665) 785 125,695 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,108,066 2013 10,410 4,278 14,688 258,241 16,323 1,603 2,854 570,766 19,897 14,186 2,795 21,280 9,705 932,338 164,912 620,849 785,761 8,655 12,102 6,947 813,465 — 66,785 65,475 (11,665) (1,722) 118,873 932,338 A N N U A L R E P O R T 2 0 1 4 7 L C N B C O R P. 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortization of intangibles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FDIC premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ATM expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computer maintenance and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Telephone expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contracted services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Merger-related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other non-interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL NON-INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PROVISION FOR INCOME TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per common share: Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average shares outstanding: Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 $32,706 3,757 2,713 301 39,477 3,161 22 407 3,590 35,887 930 34,957 2,903 4,838 149 671 147 434 9,142 15,762 1,316 2,232 955 703 574 660 624 794 690 880 285 1,400 3,969 30,844 13,255 3,386 $ 9,869 $ 1.06 1.05 2013 27,325 3,369 2,573 230 33,497 3,602 25 438 4,065 29,432 588 28,844 2,518 4,155 1,060 678 339 340 9,090 13,487 1,232 2,042 846 561 334 499 534 616 566 568 (30) 1,433 3,524 26,212 11,722 2,942 8,780 1.12 1.10 2012 23,585 3,737 2,441 175 29,938 4,317 16 556 4,889 25,049 1,351 23,698 2,317 3,605 1,853 578 506 190 9,049 11,614 1,100 1,671 790 526 57 405 620 524 465 441 490 79 2,900 21,682 11,065 2,795 8,270 1.23 1.22 9,297,019 9,406,346 7,852,514 7,982,997 6,717,357 6,802,475 A N N U A L R E P O R T 2 0 1 4 8 L C N B C O R P. LCNB National Bank Locations and Hours MAIN OFFICE • 2 North Broadway • P.O. Box 59 • Lebanon, Ohio 45036 BUTLER COUNTY Fairfield Office 765 Nilles Rd. Fairfield, Ohio 45014 Hamilton Office 794 NW Washington Blvd. Hamilton, Ohio 45013 Middletown Office 4441 Marie Drive Middletown, Ohio 45044 Monroe Office 101 Clarence F. Warner Drive Monroe, Ohio 45050 Okeana Office 6225 Cincinnati-Brookville Rd. Okeana, Ohio 45053 Oxford Office 30 West Park Place Oxford, Ohio 45056 CLERMONT COUNTY Goshen Office 6726 Dick Flynn Blvd. (St. Rte. 28 & 132) Goshen, Ohio 45122 CLINTON COUNTY Wilmington Office 1243 Rombach Avenue Wilmington, Ohio 45177 FAYETTE COUNTY Washington Court House Office 100 Crossings Drive Washington Court House, Ohio 43160 HAMILTON COUNTY Colerain Township Office 3209 West Galbraith Rd. Cincinnati, Ohio 45239 Loveland Office 500 Loveland-Madeira Rd. Loveland, Ohio 45140 BRANCH OFFICES MONTGOMERY COUNTY Centerville Office 9605 Dayton-Lebanon Pike (St. Rte. 48) Centerville, Ohio 45458 Oakwood Office 2705 Far Hills Avenue Dayton, Ohio 45419 PREBLE COUNTY Barron Street Office 1697 North Barron Street Eaton, Ohio 45320 Eaton Office 110 West Main Street Eaton, Ohio 45320 Lewisburg Office 522 South Commerce Street Lewisburg, Ohio 45338 New Paris Office 201 South Washington Street New Paris, Ohio 45347 West Alexandria Office 55 East Dayton Street West Alexandria, Ohio 45381 ROSS COUNTY Bridge Street Office 1240 North Bridge Street Chillicothe, Ohio 45601 Chillicothe Office 33 West Main Street Chillicothe, Ohio 45601 Clarksburg Office 10820 Main Street Clarksburg, Ohio 43115 Frankfort Office 1 North Main St. Frankfort, Ohio 45628 Western Avenue Office 1006 Western Avenue Chillicothe, Ohio 45601 WARREN COUNTY Auto Bank 35 N. Mechanic Lebanon, Ohio 45036 Columbus Avenue Office 730 Columbus Avenue Lebanon, Ohio 45036 Hunter Office 3878 St. Rte. 122 Franklin, Ohio 45005 Lebanon High School Office Warrior Branch 1916 Drake Road Lebanon, Ohio 45036 Maineville/Hamilton Township Office 7795 South State Route 48 Maineville, Ohio 45039 Mason/West Chester Office 1050 Reading Road (U.S. Rte. 42) Mason, Ohio 45040 Otterbein Office Campus Center Building 585 N. St. Rte. 741 Lebanon, Ohio 45036 Roachester/Morrow Office 6123 East U.S. 22 & 3 Morrow, Ohio 45152 South Lebanon Office 603 Corwin Nixon Blvd. South Lebanon, Ohio 45065 Springboro/Franklin Office 525 West Central Ave. (St. Rte. 73) Springboro, Ohio 45066 Waynesville Office 9 N. Main Street Waynesville, Ohio 45068 ELECTRONIC BRANCH • Countryside YMCA • 1699 Deerfield Road • Lebanon, Ohio 45036 BANKING HOURS All locations (except as noted) Monday - Thursday . . . . . . . . . . . . . . . 9-5 Friday . . . . . . . . . . . . . . . . . . . . . . . . . . 9-6 Saturday . . . . . . . . . . . . . . . . . . . . . . . . 9-1 Drive-Thru open Mon.- Sat. at 8:30 am Barron Street Office Monday - Friday. . . . . . . . . . . . . . . . . . 9-6 Saturday . . . . . . . . . . . . . . . . . . . . . . . . 9-1 Drive-Thru open Mon.- Sat. at 8:30 am Chillicothe Office – Main Street Saturday (Office and Drive Thru) Closed Okeana Monday, Tuesday, Thursday . . . 9-12/1-5 Wednesday . . . . . . . . . . . . . . . . . . . . Closed Friday . . . . . . . . . . . . . . . . . . . . . . 9-12/1-6 Saturday . . . . . . . . . . . . . . . . . . . . . . . . 9-1 Otterbein Monday-Thursday. . . . . . . . . . . . 9-12/1-5 Friday . . . . . . . . . . . . . . . . . . . . . . 9-12/1-6 Saturday . . . . . . . . . . . . . . . . . . . . . . Closed PHONE NUMBERS CenturyLink Customers (513) 932-1414 AT&T Customers ............ (513) 423-9911 Cincinnati Bell Cust. ...... (513) 677-2203 Dayton Area .................... (937) 704-9490 Fayette County ............... (740) 335-2257 Oxford Area .................... (513) 523-2141 Preble County ................. (937) 456-5544 Ross County .................... (740) 775-6777 Wilmington Area ............ (937) 383-4500 Toll Free ....................... (800) 344-BANK 2 2 6 5 FAX ................................. (513) 933-LCNB 5 2 6 2 “BANKLINE” 24-Hour Automated Telephone Banking Service CenturyLink Customers (513) 932-BANK 2 2 6 5 AT&T/Verizon Customers (toll-free) (888) 786-5262 Cincinnati Bell Customers (513) 336-BANK 2 2 6 5 Up-To-The-Minute Time•Temperature•Weather CenturyLink .................... (513) 932-1111 AT&T Customers ............. (513) 727-1010 =F www.LCNB.com MEMBER FDIC 3/15 

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