|
|
|
|
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
|
Ohio
|
|
31-1626393
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
Title of Each Class
|
|
Name of each exchange on which registered
|
None
|
|
None
|
o
Large accelerated filer
|
x
Accelerated filer
|
o
Non-accelerated filer (Do not check if a smaller reporting company)
|
o
Smaller reporting company
|
|
|
|
|
|
PART I
|
|
Item 1.
Business
|
|
Item 1A.
Risk Factors
|
|
Item 1B.
Unresolved Staff Comments
|
|
Item 2.
Properties
|
|
Item 3.
Legal Proceedings
|
|
Item 4.
Mine Safety Disclosures
|
|
|
|
PART II
|
|
Item 6.
Selected Financial Data
|
|
Item 9A.
Controls and Procedures
|
|
Item 9B.
Other Information
|
|
|
|
PART III
|
|
Item 11.
Executive Compensation
|
|
|
|
PART IV
|
|
|
|
1.
|
the success, impact, and timing of the implementation of LCNB’s business strategies, including the successful integration of recently completed and pending acquisitions;
|
2.
|
LCNB may incur increased charge-offs in the future;
|
3.
|
LCNB may face competitive loss of customers;
|
4.
|
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;
|
5.
|
changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
|
6.
|
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;
|
7.
|
LCNB may experience difficulties growing loan and deposit balances;
|
8.
|
the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations;
|
9.
|
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; and
|
10.
|
the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the regulations promulgated and to be promulgated thereunder, which may subject LCNB and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses.
|
|
Warren
|
Butler
|
Clinton
|
Preble
|
Ross
|
Fayette
|
Hamilton
|
Montgomery
|
||||||||||||||||
Population:
|
|
|
|
|
|
|
|
|
||||||||||||||||
2000 census
|
158,383
|
|
332,807
|
|
40,543
|
|
42,337
|
|
73,345
|
|
28,433
|
|
845,303
|
|
559,062
|
|
||||||||
2010 census
|
212,693
|
|
368,130
|
|
42,040
|
|
42,270
|
|
78,064
|
|
29,030
|
|
802,374
|
|
535,153
|
|
||||||||
Percentage increase/decrease in population
|
34.3
|
%
|
10.6
|
%
|
3.0
|
%
|
(0.2
|
)%
|
6.4
|
%
|
2.1
|
%
|
(5.1
|
)%
|
(4.3
|
)%
|
||||||||
Estimated percentage of persons below poverty level
|
5.9
|
%
|
12.8
|
%
|
14.0
|
%
|
10.7
|
%
|
17.5
|
%
|
18.5
|
%
|
15.4
|
%
|
15.7
|
%
|
||||||||
Estimated median household income
|
$
|
71,274
|
|
$
|
54,788
|
|
$
|
46,261
|
|
$
|
48,899
|
|
$
|
42,626
|
|
$
|
39,599
|
|
$
|
48,234
|
|
$
|
43,965
|
|
Median age
|
37.0
|
|
35.7
|
|
37.7
|
|
41.0
|
|
39.5
|
|
39.3
|
|
36.9
|
|
38.7
|
|
||||||||
Unemployment rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
December 2015
|
3.9
|
%
|
4.2
|
%
|
5.7
|
%
|
4.6
|
%
|
5.4
|
%
|
4.7
|
%
|
4.1
|
%
|
4.7
|
%
|
||||||||
December 2014
|
3.9
|
%
|
4.3
|
%
|
6.3
|
%
|
4.5
|
%
|
5.4
|
%
|
4.5
|
%
|
4.3
|
%
|
4.8
|
%
|
||||||||
December 2013
|
5.5
|
%
|
6.2
|
%
|
8.8
|
%
|
6.4
|
%
|
7.6
|
%
|
5.9
|
%
|
6.0
|
%
|
7.0
|
%
|
1.
|
Required regulatory agencies to take "prompt corrective action" with financial institutions that do not meet minimum capital requirements;
|
2.
|
Established five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized;
|
3.
|
Imposed significant restrictions on the operations of a financial institution that is not rated well-capitalized or adequately capitalized;
|
4.
|
Prohibited a depository institution from making any capital distributions, including payments of dividends or paying any management fee to its holding company, if the institution would be undercapitalized as a result;
|
5.
|
Implemented a risk-based premium system;
|
6.
|
Required an audit committee to be comprised of outside directors;
|
7.
|
Required a financial institution with more than $1 billion in total assets to issue annual, audited financial statements prepared in conformity with U.S. generally accepted accounting principles; and
|
8.
|
Required a financial institution with more than $1 billion in total assets to document, evaluate, and report on the effectiveness of the entity's internal control system and required an independent public accountant to attest to management's assertions concerning the bank's internal control system.
|
1.
|
Certification of financial reports by the chief executive officer ("CEO") and the chief financial officer ("CFO"), who are responsible for designing and monitoring internal controls to ensure that material information relating to the issuer and its consolidated subsidiaries is made known to the certifying officers by others within the company;
|
2.
|
Inclusion of an internal control report in annual reports that include management's assessment of the effectiveness of a company's internal control over financial reporting and a report by the company's independent registered public accounting firm attesting to the effectiveness of internal control over financial reporting;
|
3.
|
Accelerated reporting of stock trades on Form 4 by directors and executive officers;
|
4.
|
Disgorgement requirements of incentive pay or stock-based compensation profits received within twelve months of the release of financial statements if the company is later required to restate those financial statements due to material noncompliance with any financial reporting requirement that resulted from misconduct;
|
5.
|
Disclosure in a company's periodic reports stating if it has adopted a code of ethics for its CFO and principal accounting officer or controller and, if such code of ethics has been implemented, immediate disclosure of any change in or waiver of the code of ethics;
|
6.
|
Disclosure in a company's periodic reports stating if at least one member of the audit committee is a "financial expert," as that term is defined by the Securities and Exchange Commission (the "SEC"); and
|
7.
|
Implementation of new duties and responsibilities for a company's audit committee, including independence requirements, the direct responsibility to appoint the outside auditing firm and to provide oversight of the auditing firm's work, and a requirement to establish procedures for the receipt, retention, and treatment of complaints from a company's employees regarding questionable accounting, internal control, or auditing matters.
|
1.
|
Merging the Bank Insurance Fund and the Savings Association Insurance Fund into a new fund called the Deposit Insurance Fund, effective March 31, 2006;
|
2.
|
Increasing insurance coverage for retirement accounts from $100,000 to $250,000, effective April 1, 2006; and
|
3.
|
Eliminating a 1.25% hard target Designated Reserve Ratio, as defined, and giving the FDIC discretion to set the Designated Reserve Ratio within a range of 1.15% to 1.50% for any given year.
|
|
At December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
|
(Dollars in thousands)
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
||||
U.S. Treasury notes
|
$
|
72,846
|
|
|
62,560
|
|
|
12,894
|
|
U.S. Agency notes
|
139,889
|
|
|
83,637
|
|
|
106,675
|
|
|
U.S. Agency mortgage-backed securities
|
29,378
|
|
|
38,032
|
|
|
40,309
|
|
|
Certificates of deposit
|
249
|
|
|
3,086
|
|
|
1,501
|
|
|
Municipal securities
|
132,420
|
|
|
93,790
|
|
|
92,642
|
|
|
Mutual funds
|
2,466
|
|
|
2,461
|
|
|
2,380
|
|
|
Trust preferred securities
|
50
|
|
|
50
|
|
|
147
|
|
|
Equity securities
|
680
|
|
|
1,749
|
|
|
1,693
|
|
|
Total securities available-for-sale
|
377,978
|
|
|
285,365
|
|
|
258,241
|
|
|
|
|
|
|
|
|
||||
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
Municipal securities
|
22,633
|
|
|
22,725
|
|
|
16,323
|
|
|
|
|
|
|
|
|
||||
Federal Reserve Bank stock
|
2,732
|
|
|
2,346
|
|
|
1,603
|
|
|
Federal Home Loan Bank stock
|
3,638
|
|
|
3,638
|
|
|
2,854
|
|
|
Total securities
|
$
|
406,981
|
|
|
314,074
|
|
|
279,021
|
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
||||||||||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Yield
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Yield
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
U.S. Treasury notes:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Within one year
|
$
|
9,091
|
|
|
9,081
|
|
|
0.67
|
%
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
One to five years
|
36,725
|
|
|
36,923
|
|
|
1.60
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Five to ten years
|
26,856
|
|
|
26,842
|
|
|
1.94
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total U.S. Treasury notes
|
72,672
|
|
|
72,846
|
|
|
1.61
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Agency notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Within one year
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
One to five years
|
83,404
|
|
|
83,085
|
|
|
1.48
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Five to ten years
|
57,472
|
|
|
56,804
|
|
|
2.06
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total U.S. Agency notes
|
140,876
|
|
|
139,889
|
|
|
1.72
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Within one year
|
248
|
|
|
249
|
|
|
1.16
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
One to five years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Five to ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total certificates of deposit
|
248
|
|
|
249
|
|
|
1.16
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal securities (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Within one year
|
13,672
|
|
|
13,829
|
|
|
3.28
|
%
|
|
3,819
|
|
|
3,831
|
|
|
2.43
|
%
|
||
One to five years
|
62,645
|
|
|
63,589
|
|
|
3.03
|
%
|
|
3,904
|
|
|
3,882
|
|
|
3.04
|
%
|
||
Five to ten years
|
54,321
|
|
|
55,002
|
|
|
3.26
|
%
|
|
3,168
|
|
|
3,107
|
|
|
3.40
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
11,742
|
|
|
11,810
|
|
|
6.31
|
%
|
||
Total Municipal securities
|
130,638
|
|
|
132,420
|
|
|
3.15
|
%
|
|
22,633
|
|
|
22,630
|
|
|
4.68
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Agency mortgage-backed securities
|
29,608
|
|
|
29,378
|
|
|
2.39
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Mutual funds
|
2,517
|
|
|
2,466
|
|
|
1.92
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Trust preferred securities
|
49
|
|
|
50
|
|
|
7.78
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Equity securities
|
659
|
|
|
680
|
|
|
4.57
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Totals
|
$
|
377,267
|
|
|
377,978
|
|
|
2.25
|
%
|
|
22,633
|
|
|
22,630
|
|
|
4.68
|
%
|
(1)
|
Yields on tax-exempt obligations are computed on a taxable-equivalent basis based upon a 34% statutory Federal income tax rate.
|
|
At December 31,
|
|||||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Commercial and industrial
|
$
|
45,275
|
|
|
5.9
|
%
|
|
$
|
35,424
|
|
|
5.1
|
%
|
|
$
|
29,337
|
|
|
5.1
|
%
|
|
$
|
26,236
|
|
|
5.8
|
%
|
|
$
|
30,990
|
|
|
6.7
|
%
|
Commercial, secured by real estate
|
419,633
|
|
|
54.5
|
%
|
|
379,141
|
|
|
54.3
|
%
|
|
314,252
|
|
|
54.7
|
%
|
|
230,256
|
|
|
50.7
|
%
|
|
219,188
|
|
|
47.6
|
%
|
|||||
Residential real estate
|
273,139
|
|
|
35.4
|
%
|
|
254,087
|
|
|
36.4
|
%
|
|
215,587
|
|
|
37.6
|
%
|
|
183,132
|
|
|
40.4
|
%
|
|
186,904
|
|
|
40.5
|
%
|
|||||
Consumer
|
18,510
|
|
|
2.4
|
%
|
|
18,006
|
|
|
2.5
|
%
|
|
12,643
|
|
|
2.2
|
%
|
|
10,554
|
|
|
2.3
|
%
|
|
14,562
|
|
|
3.2
|
%
|
|||||
Agricultural
|
13,479
|
|
|
1.7
|
%
|
|
11,472
|
|
|
1.6
|
%
|
|
2,472
|
|
|
0.4
|
%
|
|
1,668
|
|
|
0.4
|
%
|
|
2,835
|
|
|
0.6
|
%
|
|||||
Other loans, including deposit overdrafts
|
665
|
|
|
0.1
|
%
|
|
680
|
|
|
0.1
|
%
|
|
91
|
|
|
—
|
%
|
|
1,875
|
|
|
0.4
|
%
|
|
6,554
|
|
|
1.4
|
%
|
|||||
|
770,701
|
|
|
100.0
|
%
|
|
698,810
|
|
|
100.0
|
%
|
|
574,382
|
|
|
100.0
|
%
|
|
453,721
|
|
|
100.0
|
%
|
|
461,033
|
|
|
100.0
|
%
|
|||||
Deferred origination costs (fees), net
|
237
|
|
|
|
|
|
146
|
|
|
|
|
|
(28
|
)
|
|
|
|
|
62
|
|
|
|
|
|
229
|
|
|
|
|
|||||
Total loans
|
770,938
|
|
|
|
|
|
698,956
|
|
|
|
|
|
574,354
|
|
|
|
|
|
453,783
|
|
|
|
|
|
461,262
|
|
|
|
|
|||||
Less allowance for loan losses
|
3,129
|
|
|
|
|
|
3,121
|
|
|
|
|
|
3,588
|
|
|
|
|
|
3,437
|
|
|
|
|
|
2,931
|
|
|
|
|
|||||
Loans, net
|
$
|
767,809
|
|
|
|
|
|
$
|
695,835
|
|
|
|
|
|
$
|
570,766
|
|
|
|
|
|
$
|
450,346
|
|
|
|
|
|
$
|
458,331
|
|
|
|
|
|
(In thousands)
|
||
|
|
||
Maturing in one year or less
|
$
|
33,115
|
|
Maturing after one year, but within five years
|
63,883
|
|
|
Maturing beyond five years
|
381,389
|
|
|
Total commercial and agricultural loans
|
$
|
478,387
|
|
|
|
|
|
Loans maturing beyond one year:
|
|
|
|
Fixed rate
|
$
|
155,886
|
|
Variable rate
|
289,386
|
|
|
Total
|
$
|
445,272
|
|
|
At December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollars in thousands)
|
||||||||||||||
Non-accrual loans
|
$
|
1,723
|
|
|
5,599
|
|
|
2,961
|
|
|
2,283
|
|
|
3,668
|
|
Past-due 90 days or more and still accruing
|
559
|
|
|
203
|
|
|
250
|
|
|
128
|
|
|
39
|
|
|
Accruing restructured loans
|
13,723
|
|
|
14,269
|
|
|
15,151
|
|
|
13,343
|
|
|
14,739
|
|
|
Total
|
$
|
16,005
|
|
|
20,071
|
|
|
18,362
|
|
|
15,754
|
|
|
18,446
|
|
Percent to total loans
|
2.08
|
%
|
|
2.87
|
%
|
|
3.20
|
%
|
|
3.47
|
%
|
|
4.00
|
%
|
|
At December 31,
|
|||||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||||||||||||
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Commercial and industrial
|
$
|
244
|
|
|
5.9
|
%
|
|
$
|
129
|
|
|
5.1
|
%
|
|
$
|
175
|
|
|
5.1
|
%
|
|
$
|
320
|
|
|
5.8
|
%
|
|
$
|
162
|
|
|
6.7
|
%
|
Commercial, secured by real estate
|
1,908
|
|
|
54.5
|
%
|
|
1,990
|
|
|
54.3
|
%
|
|
2,520
|
|
|
54.7
|
%
|
|
2,296
|
|
|
50.7
|
%
|
|
1,941
|
|
|
47.6
|
%
|
|||||
Residential real estate
|
854
|
|
|
35.4
|
%
|
|
926
|
|
|
36.4
|
%
|
|
826
|
|
|
37.6
|
%
|
|
712
|
|
|
40.4
|
%
|
|
656
|
|
|
40.5
|
%
|
|||||
Consumer
|
54
|
|
|
2.4
|
%
|
|
63
|
|
|
2.5
|
%
|
|
66
|
|
|
2.2
|
%
|
|
108
|
|
|
2.3
|
%
|
|
166
|
|
|
3.2
|
%
|
|||||
Agricultural
|
66
|
|
|
1.7
|
%
|
|
11
|
|
|
1.6
|
%
|
|
—
|
|
|
0.4
|
%
|
|
—
|
|
|
0.4
|
%
|
|
—
|
|
|
0.6
|
%
|
|||||
Other loans, including deposit overdrafts
|
3
|
|
|
0.1
|
%
|
|
2
|
|
|
0.1
|
%
|
|
1
|
|
|
—
|
%
|
|
1
|
|
|
0.4
|
%
|
|
6
|
|
|
1.4
|
%
|
|||||
Unallocated
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
3,129
|
|
|
100.0
|
%
|
|
$
|
3,121
|
|
|
100.0
|
%
|
|
$
|
3,588
|
|
|
100.0
|
%
|
|
$
|
3,437
|
|
|
100.0
|
%
|
|
$
|
2,931
|
|
|
100.0
|
%
|
|
|
Name of Office
|
|
Address
|
|
|
|
|
|
|
|
|
|
1.
|
|
Main Office
|
|
2 North Broadway
Lebanon, Ohio 45036
|
|
Owned
|
|
|
|
|
|
|
|
2.
|
|
Auto Bank
|
|
Silver and Mechanic Streets
Lebanon, Ohio 45036
|
|
Owned
|
|
|
|
|
|
|
|
3.
|
|
Barron Street Office
|
|
1697 North Barron Street
Eaton, Ohio 45320
|
|
Leased
|
|
|
|
|
|
|
|
4.
|
|
Bridge Street Office
|
|
1240 North Bridge Street
Chillicothe, Ohio 45601
|
|
Owned
|
|
|
|
|
|
|
|
5.
|
|
Brookville Office
|
|
225 West Upper Lewisburg Salem Road Brookville, Ohio 45309
|
|
Owned
|
|
|
|
|
|
|
|
6.
|
|
Centerville Office
|
|
9605 Dayton-Lebanon Pike
Centerville, Ohio 45458
|
|
Owned
|
|
|
|
|
|
|
|
7.
|
|
Chillicothe Office
|
|
33 West Main Street
Chillicothe, Ohio 45601
|
|
Owned
|
|
|
|
|
|
|
|
8.
|
|
Clarksburg Office
|
|
10820 Main Street
Clarksburg, Ohio 43115
|
|
Owned
|
|
|
|
|
|
|
|
9.
|
|
Colerain Township Office
|
|
3209 West Galbraith Road
Cincinnati, Ohio 45239
|
|
Owned
|
|
|
|
|
|
|
|
10.
|
|
Columbus Avenue Office
|
|
730 Columbus Avenue
Lebanon, Ohio 45036
|
|
Owned
|
|
|
|
|
|
|
|
11.
|
|
Eaton Office
|
|
110 West Main Street
Eaton, Ohio 45320
|
|
Owned
|
|
|
|
|
|
|
|
12.
|
|
Fairfield Office
|
|
765 Nilles Road
Fairfield, Ohio 45014
|
|
Leased
|
|
|
|
|
|
|
|
13.
|
|
Frankfort Office
|
|
Springfield and Main Streets
Frankfort, Ohio 45628
|
|
Owned
|
|
|
|
|
|
|
|
14.
|
|
Goshen Office
|
|
6726 Dick Flynn Blvd.
Goshen, Ohio 45122
|
|
Owned
|
|
|
|
|
|
|
|
15.
|
|
Hamilton Office
|
|
794 NW Washington Blvd.
Hamilton, Ohio 45013
|
|
Owned
|
|
|
|
|
|
|
|
16.
|
|
Hay Avenue Office
|
|
121 Hay Avenue
Brookville, Ohio 45309 |
|
Owned
|
|
|
|
|
|
|
|
17.
|
|
Hunter Office
|
|
3878 State Route 122
Franklin, Ohio 45005
|
|
Owned
|
|
|
|
|
|
|
|
18.
|
|
Lewisburg Office
|
|
522 South Commerce Street
Lewisburg, Ohio 45338
|
|
Owned
|
|
|
Name of Office
|
|
Address
|
|
|
|
|
|
|
|
|
|
19.
|
|
Loveland Office
|
|
500 Loveland-Madeira Road
Loveland, OH 45140
|
|
Owned
|
|
|
|
|
|
|
|
20.
|
|
Maineville Office
|
|
7795 South State Route 48
Maineville, Ohio 45039
|
|
Owned
|
|
|
|
|
|
|
|
21.
|
|
Mason/West Chester Office
|
|
1050 Reading Road
Mason, Ohio 45040
|
|
Owned
|
|
|
|
|
|
|
|
22.
|
|
Middletown Office
|
|
4441 Marie Drive
Middletown, Ohio 45044
|
|
Owned
|
|
|
|
|
|
|
|
23.
|
|
Monroe Office
|
|
101 Clarence F. Warner Drive
Monroe, Ohio 45050
|
|
Owned
|
|
|
|
|
|
|
|
24.
|
|
New Paris Office
|
|
201 South Washington Street
New Paris, Ohio 45347
|
|
Owned
|
|
|
|
|
|
|
|
25.
|
|
Oakwood Office
|
|
2705 Far Hills Avenue
Oakwood, Ohio 45419
|
|
(2)
|
|
|
|
|
|
|
|
26.
|
|
Okeana Office (closed February 12, 2016)
|
|
6225 Cincinnati-Brookville Road
Okeana, Ohio 45053
|
|
Owned
|
|
|
|
|
|
|
|
27.
|
|
Otterbein Office
|
|
Otterbein Retirement Community
State Route 741
Lebanon, Ohio 45036
|
|
Leased
|
|
|
|
|
|
|
|
28.
|
|
Oxford Office (1)
|
|
30 West Park Place
Oxford, Ohio 45056
|
|
(2)
|
|
|
|
|
|
|
|
29.
|
|
Rochester/Morrow Office
|
|
Route 22-3 at 123
Morrow, Ohio 45152
|
|
Owned
|
|
|
|
|
|
|
|
30.
|
|
South Lebanon Office
|
|
603 Corwin Nixon Blvd.
South Lebanon, Ohio 45065
|
|
Owned
|
|
|
|
|
|
|
|
31.
|
|
Springboro/Franklin Office
|
|
525 West Central Avenue
Springboro, Ohio 45066
|
|
Owned
|
|
|
|
|
|
|
|
32.
|
|
Warrior Office
|
|
Lebanon High School
1916 Drake Road
Lebanon, Ohio 45036
|
|
Leased
|
|
|
|
|
|
|
|
33.
|
|
Washington Court House Office
|
|
100 Crossings Drive
Washington Court House, Ohio 43160
|
|
Owned
|
|
|
|
|
|
|
|
34.
|
|
Waynesville Office
|
|
9 North Main Street
Waynesville, Ohio 45068
|
|
Owned
|
|
|
|
|
|
|
|
35.
|
|
West Alexandria Office
|
|
55 East Dayton Street
West Alexandria, Ohio 45381
|
|
Owned
|
|
|
|
|
|
|
|
36.
|
|
Western Avenue Office
|
|
1006 Western Avenue
Chillicothe, Ohio 45601
|
|
Owned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Office
|
|
Address
|
|
|
|
|
|
|
|
|
|
37.
|
|
Wilmington Office
|
|
1243 Rombach Avenue
Wilmington, Ohio 45177
|
|
Owned
|
|
|
|
|
|
|
|
38.
|
|
Operations Center (under construction)
|
|
105 North Broadway
Lebanon, Ohio 45036 |
|
Owned
|
(1)
|
Excess space in this office is leased to third parties.
|
(2)
|
The Bank owns the Oakwood and Oxford office buildings and leases the land.
|
|
2015
|
|
2014
|
|||||||||||||||
|
High
|
|
Low
|
|
Dividends Declared
|
|
High
|
|
Low
|
|
Dividends Declared
|
|||||||
First Quarter
|
$
|
16.40
|
|
|
13.95
|
|
|
0.16
|
|
|
18.24
|
|
|
17.25
|
|
|
0.16
|
|
Second Quarter
|
17.88
|
|
|
15.01
|
|
|
0.16
|
|
|
18.89
|
|
|
14.67
|
|
|
0.16
|
|
|
Third Quarter
|
16.40
|
|
|
15.26
|
|
|
0.16
|
|
|
17.14
|
|
|
14.84
|
|
|
0.16
|
|
|
Fourth Quarter
|
17.18
|
|
|
15.07
|
|
|
0.16
|
|
|
15.43
|
|
|
13.83
|
|
|
0.16
|
|
|
Total dividends declared
|
|
|
|
|
0.64
|
|
|
|
|
|
|
0.64
|
|
Plan Category
|
Number of Securities to
be Issued upon Exercise
of Outstanding Options
|
|
Weighted Average
Exercise Price of
Outstanding Options
|
|
Number of Securities
Remaining Available
for Future Issuance
|
||||
Equity compensation plans approved by security holders
|
83,861
|
|
|
$
|
12.39
|
|
|
433,962
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
83,861
|
|
|
$
|
12.39
|
|
|
433,962
|
|
|
|
Period Ending
|
|
||||||||||
Index
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
|
LCNB Corp.
|
$
|
100.00
|
|
114.16
|
|
126.65
|
|
171.16
|
|
150.37
|
|
169.90
|
|
NASDAQ Composite
|
$
|
100.00
|
|
99.21
|
|
116.82
|
|
163.75
|
|
188.03
|
|
201.40
|
|
SNL Midwest Bank index
|
$
|
100.00
|
|
94.46
|
|
113.69
|
|
155.65
|
|
169.21
|
|
171.78
|
|
|
|
|
|
|
|
|
|||||||
Source : SNL Financial LC, Charlottesville, VA
|
|||||||||||||
© 2016
|
|
|
|
|
|
|
|||||||
www.snl.com
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollars in thousands, except ratios and per share data)
|
||||||||||||||
Income Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
|
42,659
|
|
|
39,477
|
|
|
33,497
|
|
|
29,938
|
|
|
32,093
|
|
Interest expense
|
3,328
|
|
|
3,590
|
|
|
4,065
|
|
|
4,889
|
|
|
6,387
|
|
|
Net interest income
|
39,331
|
|
|
35,887
|
|
|
29,432
|
|
|
25,049
|
|
|
25,706
|
|
|
Provision for loan losses
|
1,366
|
|
|
930
|
|
|
588
|
|
|
1,351
|
|
|
2,089
|
|
|
Net interest income after provision for loan losses
|
37,965
|
|
|
34,957
|
|
|
28,844
|
|
|
23,698
|
|
|
23,617
|
|
|
Non-interest income
|
10,123
|
|
|
9,142
|
|
|
9,090
|
|
|
9,049
|
|
|
7,764
|
|
|
Non-interest expenses
|
32,392
|
|
|
30,844
|
|
|
26,212
|
|
|
21,682
|
|
|
21,849
|
|
|
Income before income taxes
|
15,696
|
|
|
13,255
|
|
|
11,722
|
|
|
11,065
|
|
|
9,532
|
|
|
Provision for income taxes
|
4,222
|
|
|
3,386
|
|
|
2,942
|
|
|
2,795
|
|
|
2,210
|
|
|
Net income from continuing operations
|
11,474
|
|
|
9,869
|
|
|
8,780
|
|
|
8,270
|
|
|
7,322
|
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
793
|
|
|
Net income
|
$
|
11,474
|
|
|
9,869
|
|
|
8,780
|
|
|
8,270
|
|
|
8,115
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends per common share
|
$
|
0.64
|
|
|
0.64
|
|
|
0.64
|
|
|
0.64
|
|
|
0.64
|
|
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
1.18
|
|
|
1.06
|
|
|
1.12
|
|
|
1.23
|
|
|
1.09
|
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.12
|
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
1.17
|
|
|
1.05
|
|
|
1.10
|
|
|
1.22
|
|
|
1.08
|
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
$
|
406,981
|
|
|
314,074
|
|
|
279,021
|
|
|
276,970
|
|
|
267,771
|
|
Loans, net
|
767,809
|
|
|
695,835
|
|
|
570,766
|
|
|
450,346
|
|
|
458,331
|
|
|
Total assets
|
1,280,531
|
|
|
1,108,066
|
|
|
932,338
|
|
|
788,637
|
|
|
791,570
|
|
|
Total deposits
|
1,087,160
|
|
|
946,205
|
|
|
785,761
|
|
|
671,471
|
|
|
663,562
|
|
|
Short-term borrowings
|
37,387
|
|
|
16,645
|
|
|
8,655
|
|
|
13,756
|
|
|
21,596
|
|
|
Long-term debt
|
5,947
|
|
|
11,357
|
|
|
12,102
|
|
|
13,705
|
|
|
21,373
|
|
|
Total shareholders' equity
|
140,108
|
|
|
125,695
|
|
|
118,873
|
|
|
82,006
|
|
|
77,960
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selected Financial Ratios and Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
0.94
|
%
|
|
0.88
|
%
|
|
0.93
|
%
|
|
1.02
|
%
|
|
1.02
|
%
|
|
Return on average equity
|
8.43
|
%
|
|
8.04
|
%
|
|
9.02
|
%
|
|
10.22
|
%
|
|
10.89
|
%
|
|
Equity-to-assets ratio
|
10.94
|
%
|
|
11.34
|
%
|
|
12.75
|
%
|
|
10.40
|
%
|
|
9.85
|
%
|
|
Dividend payout ratio
|
54.24
|
%
|
|
60.38
|
%
|
|
57.14
|
%
|
|
52.03
|
%
|
|
52.89
|
%
|
|
Net interest margin, fully taxable equivalent
|
3.64
|
%
|
|
3.66
|
%
|
|
3.57
|
%
|
|
3.52
|
%
|
|
3.70
|
%
|
1.
|
the success, impact, and timing of the implementation of LCNB’s business strategies, including the successful integration of recently completed acquisitions;
|
2.
|
LCNB may incur increased charge-offs in the future;
|
3.
|
LCNB may face competitive loss of customers;
|
4.
|
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;
|
5.
|
changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
|
6.
|
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;
|
7.
|
LCNB may experience difficulties growing loan and deposit balances;
|
8.
|
the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations;
|
9.
|
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; and
|
10.
|
the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the regulations promulgated and to be promulgated thereunder, which may subject LCNB and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses.
|
1.
|
The completion of a merger with BNB Bancorp, Inc. on April 30, 2015.
|
2.
|
The completion of a merger with Eaton National Bank & Trust Co. on January 24, 2014.
|
3.
|
The completion of a merger with First Capital Bancshares, Inc. and its subsidiary, Citizens National Bank of Chillicothe, on January 11, 2013.
|
4.
|
Net gains on sales of securities were significantly greater in 2013 when compared to 2015 and 2014.
|
5.
|
Other real estate owned expense was significantly less in 2013 as compared to 2015 and 2014 because of decreases in valuation write-downs and a gain recognized during the first quarter 2013 on the sale of commercial real estate property.
|
6.
|
Impaired loans with a carrying value of approximately $4.5 million were sold during the second second quarter 2015, significantly improving LCNB's loan quality metrics.
|
|
Years ended December 31,
|
||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||
|
Average
Outstanding
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate
|
|
Average
Outstanding
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate
|
|
Average
Outstanding
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Loans (1)
|
$
|
740,626
|
|
|
35,285
|
|
|
4.76
|
%
|
|
$
|
679,223
|
|
|
32,706
|
|
|
4.82
|
%
|
|
$
|
555,602
|
|
|
27,325
|
|
|
4.92
|
%
|
Federal funds sold
|
452
|
|
|
1
|
|
|
0.22
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
768
|
|
|
1
|
|
|
0.13
|
%
|
|||
Interest-bearing demand deposits
|
12,245
|
|
|
30
|
|
|
0.24
|
%
|
|
12,450
|
|
|
29
|
|
|
0.23
|
%
|
|
9,908
|
|
|
24
|
|
|
0.24
|
%
|
|||
Federal Reserve Bank stock
|
2,495
|
|
|
152
|
|
|
6.09
|
%
|
|
2,100
|
|
|
126
|
|
|
6.00
|
%
|
|
1,436
|
|
|
86
|
|
|
5.99
|
%
|
|||
Federal Home Loan Bank stock
|
3,638
|
|
|
146
|
|
|
4.01
|
%
|
|
3,571
|
|
|
146
|
|
|
4.09
|
%
|
|
2,826
|
|
|
119
|
|
|
4.21
|
%
|
|||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Taxable
|
245,410
|
|
|
4,197
|
|
|
1.71
|
%
|
|
219,131
|
|
|
3,757
|
|
|
1.71
|
%
|
|
192,983
|
|
|
3,369
|
|
|
1.75
|
%
|
|||
Non-taxable (2)
|
115,215
|
|
|
4,315
|
|
|
3.75
|
%
|
|
102,902
|
|
|
4,111
|
|
|
4.00
|
%
|
|
98,567
|
|
|
3,898
|
|
|
3.95
|
%
|
|||
Total earning assets
|
1,120,081
|
|
|
44,126
|
|
|
3.94
|
%
|
|
1,019,377
|
|
|
40,875
|
|
|
4.01
|
%
|
|
862,090
|
|
|
34,822
|
|
|
4.04
|
%
|
|||
Non-earning assets
|
107,919
|
|
|
|
|
|
|
|
|
104,413
|
|
|
|
|
|
|
|
|
85,970
|
|
|
|
|
|
|
|
|||
Allowance for loan losses
|
(2,888
|
)
|
|
|
|
|
|
|
|
(3,275
|
)
|
|
|
|
|
|
|
|
(3,401
|
)
|
|
|
|
|
|
|
|||
Total assets
|
$
|
1,225,112
|
|
|
|
|
|
|
|
|
$
|
1,120,515
|
|
|
|
|
|
|
|
|
$
|
944,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Savings deposits
|
$
|
608,925
|
|
|
545
|
|
|
0.09
|
%
|
|
$
|
544,698
|
|
|
474
|
|
|
0.09
|
%
|
|
$
|
454,265
|
|
|
407
|
|
|
0.09
|
%
|
IRA and time certificates
|
219,562
|
|
|
2,464
|
|
|
1.12
|
%
|
|
223,555
|
|
|
2,687
|
|
|
1.20
|
%
|
|
197,302
|
|
|
3,195
|
|
|
1.62
|
%
|
|||
Short-term borrowings
|
15,105
|
|
|
24
|
|
|
0.16
|
%
|
|
14,820
|
|
|
22
|
|
|
0.15
|
%
|
|
16,912
|
|
|
25
|
|
|
0.15
|
%
|
|||
Long-term debt
|
6,177
|
|
|
295
|
|
|
4.78
|
%
|
|
11,546
|
|
|
407
|
|
|
3.53
|
%
|
|
12,768
|
|
|
438
|
|
|
3.43
|
%
|
|||
Total interest-bearing liabilities
|
849,769
|
|
|
3,328
|
|
|
0.39
|
%
|
|
794,619
|
|
|
3,590
|
|
|
0.45
|
%
|
|
681,247
|
|
|
4,065
|
|
|
0.60
|
%
|
|||
Demand deposits
|
230,608
|
|
|
|
|
|
|
|
|
196,273
|
|
|
|
|
|
|
|
|
160,470
|
|
|
|
|
|
|
|
|||
Other liabilities
|
8,590
|
|
|
|
|
|
|
|
|
6,908
|
|
|
|
|
|
|
|
|
5,593
|
|
|
|
|
|
|
|
|||
Capital
|
136,145
|
|
|
|
|
|
|
|
|
122,716
|
|
|
|
|
|
|
|
|
97,349
|
|
|
|
|
|
|
|
|||
Total liabilities and capital
|
$
|
1,225,112
|
|
|
|
|
|
|
|
|
$
|
1,120,516
|
|
|
|
|
|
|
|
|
$
|
944,659
|
|
|
|
|
|
|
|
Net interest rate spread (3)
|
|
|
|
|
|
|
3.55
|
%
|
|
|
|
|
|
|
|
3.56
|
%
|
|
|
|
|
|
|
|
3.44
|
%
|
|||
Net interest income and net interest margin on a tax equivalent basis (4)
|
|
|
|
40,798
|
|
|
3.64
|
%
|
|
|
|
|
37,285
|
|
|
3.66
|
%
|
|
|
|
|
30,757
|
|
|
3.57
|
%
|
|||
Ratio of interest-earning assets to interest-bearing liabilities
|
131.81
|
%
|
|
|
|
|
|
|
|
128.29
|
%
|
|
|
|
|
|
|
|
126.55
|
%
|
|
|
|
|
|
|
(1)
|
Includes non-accrual loans if any.
|
(2)
|
Income from tax-exempt securities is included in interest income on a taxable-equivalent basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 34%.
|
(3)
|
The net interest spread is the difference between the average rate on total interest-earning assets and interest-bearing liabilities.
|
(4)
|
The net interest margin is the taxable-equivalent net interest income divided by average interest-earning assets.
|
|
For the years ended December 31,
|
|||||||||||||||||
|
2015 vs. 2014
|
|
2014 vs. 2013
|
|||||||||||||||
|
Increase (decrease) due to
|
|
Increase (decrease) due to
|
|||||||||||||||
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
|||||||
|
(In thousands)
|
|||||||||||||||||
Interest income attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans (1)
|
$
|
2,929
|
|
|
(350
|
)
|
|
2,579
|
|
|
5,964
|
|
|
(583
|
)
|
|
5,381
|
|
Federal funds sold
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
Interest-bearing demand deposits
|
—
|
|
|
1
|
|
|
1
|
|
|
6
|
|
|
(1
|
)
|
|
5
|
|
|
Federal Reserve Bank stock
|
24
|
|
|
2
|
|
|
26
|
|
|
40
|
|
|
—
|
|
|
40
|
|
|
Federal Home Loan Bank stock
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
31
|
|
|
(4
|
)
|
|
27
|
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
449
|
|
|
(9
|
)
|
|
440
|
|
|
449
|
|
|
(61
|
)
|
|
388
|
|
|
Non-taxable (2)
|
472
|
|
|
(268
|
)
|
|
204
|
|
|
173
|
|
|
40
|
|
|
213
|
|
|
Total interest income
|
3,878
|
|
|
(627
|
)
|
|
3,251
|
|
|
6,662
|
|
|
(609
|
)
|
|
6,053
|
|
|
Interest expense attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits
|
57
|
|
|
14
|
|
|
71
|
|
|
80
|
|
|
(13
|
)
|
|
67
|
|
|
IRA and time certificates
|
(47
|
)
|
|
(176
|
)
|
|
(223
|
)
|
|
388
|
|
|
(896
|
)
|
|
(508
|
)
|
|
Short-term borrowings
|
—
|
|
|
2
|
|
|
2
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
Long-term debt
|
(227
|
)
|
|
115
|
|
|
(112
|
)
|
|
(43
|
)
|
|
12
|
|
|
(31
|
)
|
|
Total interest expense
|
(217
|
)
|
|
(45
|
)
|
|
(262
|
)
|
|
422
|
|
|
(897
|
)
|
|
(475
|
)
|
|
Net interest income
|
$
|
4,095
|
|
|
(582
|
)
|
|
3,513
|
|
|
6,240
|
|
|
288
|
|
|
6,528
|
|
(1)
|
Non-accrual loans, if any, are included in average loan balances.
|
(2)
|
Change in interest income from non-taxable investment securities is computed based on interest income determined on a taxable-equivalent yield basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 34%.
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollars in thousands)
|
||||||||||||||
Balance – Beginning of year
|
$
|
3,121
|
|
|
3,588
|
|
|
3,437
|
|
|
2,931
|
|
|
2,641
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans charged off:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
100
|
|
|
261
|
|
|
119
|
|
|
159
|
|
|
581
|
|
|
Commercial, secured by real estate
|
1,133
|
|
|
573
|
|
|
58
|
|
|
234
|
|
|
598
|
|
|
Residential real estate
|
304
|
|
|
652
|
|
|
244
|
|
|
486
|
|
|
512
|
|
|
Consumer
|
52
|
|
|
129
|
|
|
181
|
|
|
134
|
|
|
252
|
|
|
Agricultural
|
67
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other loans, including deposit overdrafts
|
74
|
|
|
79
|
|
|
67
|
|
|
85
|
|
|
127
|
|
|
Total loans charged off
|
1,730
|
|
|
1,694
|
|
|
669
|
|
|
1,098
|
|
|
2,070
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
7
|
|
|
42
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
Commercial, secured by real estate
|
96
|
|
|
63
|
|
|
26
|
|
|
71
|
|
|
30
|
|
|
Residential real estate
|
107
|
|
|
40
|
|
|
31
|
|
|
7
|
|
|
31
|
|
|
Consumer
|
60
|
|
|
108
|
|
|
127
|
|
|
123
|
|
|
122
|
|
|
Agricultural
|
67
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other loans, including deposit overdrafts
|
35
|
|
|
44
|
|
|
44
|
|
|
52
|
|
|
88
|
|
|
Total recoveries
|
372
|
|
|
297
|
|
|
232
|
|
|
253
|
|
|
271
|
|
|
Net charge offs
|
1,358
|
|
|
1,397
|
|
|
437
|
|
|
845
|
|
|
1,799
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Provision charged to operations
|
1,366
|
|
|
930
|
|
|
588
|
|
|
1,351
|
|
|
2,089
|
|
|
Balance - End of year
|
$
|
3,129
|
|
|
3,121
|
|
|
3,588
|
|
|
3,437
|
|
|
2,931
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of net charge-offs during the period to average loans outstanding
|
0.18
|
%
|
|
0.21
|
%
|
|
0.08
|
%
|
|
0.18
|
%
|
|
0.39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of allowance for loan losses to total loans at year-end
|
0.41
|
%
|
|
0.45
|
%
|
|
0.62
|
%
|
|
0.76
|
%
|
|
0.64
|
%
|
|
At December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Specific allocations
|
$
|
363
|
|
|
11.6
|
%
|
|
$
|
817
|
|
|
26.2
|
%
|
|
$
|
1,032
|
|
|
28.8
|
%
|
General allocations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Historical loss
|
1,044
|
|
|
33.4
|
%
|
|
943
|
|
|
30.2
|
%
|
|
982
|
|
|
27.4
|
%
|
|||
Adjustments to historical loss
|
1,722
|
|
|
55.0
|
%
|
|
1,361
|
|
|
43.6
|
%
|
|
1,574
|
|
|
43.8
|
%
|
|||
Total
|
$
|
3,129
|
|
|
100.0
|
%
|
|
$
|
3,121
|
|
|
100.0
|
%
|
|
$
|
3,588
|
|
|
100.0
|
%
|
|
|
|
Payments due by period
|
||||||||||||
|
Total
|
|
1 year
or less
|
|
Over 1
through 3
years
|
|
Over 3
through 5
years
|
|
More than
5 years
|
||||||
|
(In thousands)
|
||||||||||||||
Short-term borrowings
|
$
|
37,387
|
|
|
37,387
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-term debt obligations
|
5,947
|
|
|
349
|
|
|
5,543
|
|
|
55
|
|
|
—
|
|
|
Operating lease obligations
|
5,206
|
|
|
479
|
|
|
634
|
|
|
259
|
|
|
3,834
|
|
|
Estimated pension plan contribution for 2016
|
200
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Commitment to purchase municipal security when issued
|
7,630
|
|
|
7,630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Funding commitment for affordable housing tax credit limited partnership
|
907
|
|
|
291
|
|
|
326
|
|
|
91
|
|
|
199
|
|
|
Estimated capital expenditure obligations
|
11,026
|
|
|
11,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Certificates of deposit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$100,000 and over
|
74,055
|
|
|
23,699
|
|
|
20,578
|
|
|
28,042
|
|
|
1,736
|
|
|
Other time certificates
|
143,900
|
|
|
62,205
|
|
|
36,914
|
|
|
42,275
|
|
|
2,506
|
|
|
Total
|
$
|
286,258
|
|
|
143,266
|
|
|
63,995
|
|
|
70,722
|
|
|
8,275
|
|
|
|
|
Amount of Commitment Expiration Per Period
|
||||||||||||
|
Total
Amounts
Committed
|
|
1 year
or less
|
|
Over 1
through 3
years
|
|
Over 3
through 5
years
|
|
More than
5 years
|
||||||
|
(In thousands)
|
||||||||||||||
Commitments to extend credit
|
$
|
11,815
|
|
|
11,815
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Unused lines of credit
|
106,588
|
|
|
52,035
|
|
|
22,312
|
|
|
19,462
|
|
|
12,779
|
|
|
Standby letters of credit
|
457
|
|
|
453
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
118,860
|
|
|
64,303
|
|
|
22,316
|
|
|
19,462
|
|
|
12,779
|
|
Rate Shock Scenario in
Basis Points
|
|
Amount
(In thousands)
|
|
$ Change in
Net Interest
Income
|
|
% Change in
Net Interest
Income
|
||||
Up 300
|
|
$
|
42,163
|
|
|
3,074
|
|
|
7.86
|
%
|
Up 200
|
|
41,110
|
|
|
2,021
|
|
|
5.17
|
%
|
|
Up 100
|
|
40,089
|
|
|
1,000
|
|
|
2.56
|
%
|
|
Base
|
|
39,089
|
|
|
—
|
|
|
—
|
%
|
Rate Shock Scenario in
Basis Points
|
|
Amount
(In thousands)
|
|
$ Change in
EVE
|
|
% Change in
EVE
|
||||
Up 300
|
|
$
|
135,725
|
|
|
(3,473
|
)
|
|
(2.50
|
)%
|
Up 200
|
|
136,319
|
|
|
(2,879
|
)
|
|
(2.07
|
)%
|
|
Up 100
|
|
137,176
|
|
|
(2,022
|
)
|
|
(1.45
|
)%
|
|
Base
|
|
139,198
|
|
|
—
|
|
|
—
|
%
|
/s/ Steve P. Foster
|
|
/s/ Robert C. Haines II
|
|
Steve P. Foster
|
|
Robert C. Haines II
|
|
Chief Executive Officer & President
|
|
Executive Vice President &
|
|
March 9, 2016
|
|
Chief Financial Officer
|
|
|
|
March 9, 2016
|
|
/s/ BKD, LLP
|
|
|
BKD, LLP
|
|
|
|
|
|
Cincinnati, Ohio
|
|
|
March 9, 2016
|
|
|
/s/ BKD, LLP
|
|
|
BKD, LLP
|
|
|
|
|
|
Cincinnati, Ohio
|
|
|
March 9, 2016
|
|
|
|
/s/ Clark, Schaefer, Hackett & Co. (successor of J. D. Cloud & Co. L.L.P., through merger)
|
|
|
Clark, Schaefer, Hackett & Co. (successor of J. D. Cloud & Co. L.L.P., through merger)
|
|
|
|
|
Cincinnati, Ohio
|
|
|
March 3, 2014
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||
INTEREST INCOME:
|
|
|
|
|
|
||||
Interest and fees on loans
|
$
|
35,285
|
|
|
32,706
|
|
|
27,325
|
|
Interest on investment securities:
|
|
|
|
|
|
|
|
|
|
Taxable
|
4,197
|
|
|
3,757
|
|
|
3,369
|
|
|
Non-taxable
|
2,848
|
|
|
2,713
|
|
|
2,573
|
|
|
Other investments
|
329
|
|
|
301
|
|
|
230
|
|
|
TOTAL INTEREST INCOME
|
42,659
|
|
|
39,477
|
|
|
33,497
|
|
|
|
|
|
|
|
|
||||
INTEREST EXPENSE:
|
|
|
|
|
|
|
|
|
|
Interest on deposits
|
3,009
|
|
|
3,161
|
|
|
3,602
|
|
|
Interest on short-term borrowings
|
24
|
|
|
22
|
|
|
25
|
|
|
Interest on long-term debt
|
295
|
|
|
407
|
|
|
438
|
|
|
TOTAL INTEREST EXPENSE
|
3,328
|
|
|
3,590
|
|
|
4,065
|
|
|
NET INTEREST INCOME
|
39,331
|
|
|
35,887
|
|
|
29,432
|
|
|
PROVISION FOR LOAN LOSSES
|
1,366
|
|
|
930
|
|
|
588
|
|
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
37,965
|
|
|
34,957
|
|
|
28,844
|
|
|
|
|
|
|
|
|
||||
NON-INTEREST INCOME:
|
|
|
|
|
|
|
|
|
|
Trust income
|
3,262
|
|
|
2,903
|
|
|
2,518
|
|
|
Service charges and fees on deposit accounts
|
4,920
|
|
|
4,838
|
|
|
4,155
|
|
|
Net gain on sales of securities
|
495
|
|
|
149
|
|
|
1,060
|
|
|
Bank owned life insurance income
|
625
|
|
|
671
|
|
|
678
|
|
|
Gains from sales of mortgage loans
|
343
|
|
|
147
|
|
|
339
|
|
|
Other operating income
|
478
|
|
|
434
|
|
|
340
|
|
|
TOTAL NON-INTEREST INCOME
|
10,123
|
|
|
9,142
|
|
|
9,090
|
|
|
|
|
|
|
|
|
||||
NON-INTEREST EXPENSE:
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
17,593
|
|
|
15,762
|
|
|
13,487
|
|
|
Equipment expenses
|
1,257
|
|
|
1,316
|
|
|
1,232
|
|
|
Occupancy expense, net
|
2,307
|
|
|
2,232
|
|
|
2,042
|
|
|
State franchise tax
|
1,001
|
|
|
955
|
|
|
846
|
|
|
Marketing
|
720
|
|
|
703
|
|
|
561
|
|
|
Amortization of intangibles
|
700
|
|
|
574
|
|
|
334
|
|
|
FDIC premiums
|
598
|
|
|
660
|
|
|
499
|
|
|
ATM expense
|
698
|
|
|
624
|
|
|
534
|
|
|
Computer maintenance and supplies
|
782
|
|
|
794
|
|
|
616
|
|
|
Telephone expense
|
707
|
|
|
690
|
|
|
566
|
|
|
Contracted services
|
842
|
|
|
880
|
|
|
568
|
|
|
Other real estate owned
|
489
|
|
|
285
|
|
|
(30
|
)
|
|
Merger-related expenses
|
643
|
|
|
1,400
|
|
|
1,433
|
|
|
Other non-interest expense
|
4,055
|
|
|
3,969
|
|
|
3,524
|
|
|
TOTAL NON-INTEREST EXPENSE
|
32,392
|
|
|
30,844
|
|
|
26,212
|
|
|
|
|
|
|
|
|
||||
INCOME BEFORE INCOME TAXES
|
15,696
|
|
|
13,255
|
|
|
11,722
|
|
|
PROVISION FOR INCOME TAXES
|
4,222
|
|
|
3,386
|
|
|
2,942
|
|
|
NET INCOME
|
$
|
11,474
|
|
|
9,869
|
|
|
8,780
|
|
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.18
|
|
|
1.06
|
|
|
1.12
|
|
Diluted
|
1.17
|
|
|
1.05
|
|
|
1.10
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
9,704,965
|
|
|
9,297,019
|
|
|
7,852,514
|
|
|
Diluted
|
9,811,476
|
|
|
9,406,346
|
|
|
7,982,997
|
|
|
Common
Shares
Outstanding
|
|
|
Common
Shares
|
|
|
Retained
Earnings
|
|
|
Treasury
Shares
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
Total
Shareholders'
Equity
|
|
|
Balance, December 31, 2012
|
6,731,900
|
|
|
$
|
27,107
|
|
|
61,843
|
|
|
(11,665
|
)
|
|
4,721
|
|
|
82,006
|
|
Net income
|
|
|
|
|
|
|
8,780
|
|
|
|
|
|
|
|
|
8,780
|
|
|
Other comprehensive gain (loss), net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,443
|
)
|
|
(6,443
|
)
|
|
Issuance of common stock
|
1,642,857
|
|
|
26,909
|
|
|
|
|
|
|
|
|
26,909
|
|
||||
Dividend Reinvestment and Stock Purchase Plan
|
18,348
|
|
|
329
|
|
|
|
|
|
|
|
|
|
|
|
329
|
|
|
Acquisition of First Capital Bancshares, Inc.
|
888,811
|
|
|
12,321
|
|
|
|
|
|
|
|
|
12,321
|
|
||||
Exercise of stock options
|
5,620
|
|
|
70
|
|
|
|
|
|
|
|
|
70
|
|
||||
Excess tax benefit on exercise and forfeiture of stock options
|
|
|
12
|
|
|
|
|
|
|
|
|
12
|
|
|||||
Compensation expense relating to stock options
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
Common stock dividends, $0.64 per share
|
|
|
|
|
|
|
(5,148
|
)
|
|
|
|
|
|
|
|
(5,148
|
)
|
|
Balance, December 31, 2013
|
9,287,536
|
|
|
66,785
|
|
|
65,475
|
|
|
(11,665
|
)
|
|
(1,722
|
)
|
|
118,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
|
|
|
|
|
|
9,869
|
|
|
|
|
|
|
|
|
9,869
|
|
|
Other comprehensive gain (loss), net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
2,507
|
|
|
2,507
|
|
|
Dividend Reinvestment and Stock Purchase Plan
|
23,782
|
|
|
372
|
|
|
|
|
|
|
|
|
|
|
|
372
|
|
|
Compensation expense relating to stock options
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
Common stock dividends, $0.64 per share
|
|
|
|
|
|
|
(5,950
|
)
|
|
|
|
|
|
|
|
(5,950
|
)
|
|
Balance, December 31, 2014
|
9,311,318
|
|
|
67,181
|
|
|
69,394
|
|
|
(11,665
|
)
|
|
785
|
|
|
125,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
|
|
|
|
|
|
11,474
|
|
|
|
|
|
|
|
|
11,474
|
|
|
Other comprehensive gain (loss), net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
(549
|
)
|
|
(549
|
)
|
|
Dividend Reinvestment and Stock Purchase Plan
|
24,610
|
|
|
390
|
|
|
|
|
|
|
|
|
|
|
|
390
|
|
|
Acquisition of BNB Bancorp, Inc.
|
560,132
|
|
|
9,063
|
|
|
|
|
|
|
|
|
9,063
|
|
||||
Exercise of stock options
|
13,449
|
|
|
152
|
|
|
|
|
|
|
|
|
152
|
|
||||
Excess tax benefit on exercise and forfeiture of stock options
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
Compensation expense relating to stock options
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
Compensation expense relating to restricted stock
|
16,038
|
|
|
90
|
|
|
|
|
|
|
|
|
90
|
|
||||
Common stock dividends, $0.64 per share
|
|
|
|
|
|
|
(6,239
|
)
|
|
|
|
|
|
|
|
(6,239
|
)
|
|
Balance, December 31, 2015
|
9,925,547
|
|
|
$
|
76,908
|
|
|
74,629
|
|
|
(11,665
|
)
|
|
236
|
|
|
140,108
|
|
•
|
Level 1 – quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the reporting date;
|
•
|
Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly or indirectly; and
|
•
|
Level 3 - inputs that are unobservable for the asset or liability.
|
1.
|
Requires most equity investments to be measured at fair value with changes in fair value recognized in net income.
|
2.
|
Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value.
|
3.
|
Eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.
|
4.
|
Requires use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes.
|
5.
|
Requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.
|
6.
|
Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements.
|
7.
|
Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets.
|
1.
|
The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.
|
2.
|
The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.
|
3.
|
The lease term is for the major part of the remaining economic life of the underlying asset.
|
4.
|
The present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset.
|
5.
|
The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.
|
|
BNB
|
|
Eaton National
|
|||
Consideration Paid:
|
|
|
|
|||
Common shares issued
|
$
|
9,063
|
|
|
—
|
|
Cash paid to shareholder(s)
|
4,403
|
|
|
24,750
|
|
|
Total consideration paid
|
13,466
|
|
|
24,750
|
|
|
|
|
|
|
|
||
Identifiable Assets Acquired:
|
|
|
|
|
||
Cash and cash equivalents
|
13,396
|
|
|
15,635
|
|
|
Investment securities
|
58,239
|
|
|
35,859
|
|
|
Federal Reserve Bank stock
|
130
|
|
|
41
|
|
|
Federal Home Loan Bank stock
|
—
|
|
|
784
|
|
|
Loans
|
34,661
|
|
|
115,944
|
|
|
Premises and equipment
|
2,311
|
|
|
1,314
|
|
|
Bank owned life insurance
|
—
|
|
|
3,618
|
|
|
Core deposit intangible
|
1,418
|
|
|
2,466
|
|
|
Other real estate owned
|
—
|
|
|
262
|
|
|
Other assets
|
532
|
|
|
1,624
|
|
|
Total identifiable assets acquired
|
110,687
|
|
|
177,547
|
|
|
|
|
|
|
|
||
Liabilities Assumed:
|
|
|
|
|
||
Deposits
|
99,133
|
|
|
165,335
|
|
|
Short-term borrowings
|
—
|
|
|
651
|
|
|
Deferred income taxes
|
576
|
|
|
—
|
|
|
Other liabilities
|
57
|
|
|
263
|
|
|
Total liabilities assumed
|
99,766
|
|
|
166,249
|
|
|
|
|
|
|
|
||
Total Identifiable Net Assets Acquired
|
10,921
|
|
|
11,298
|
|
|
|
|
|
|
|
||
Goodwill resulting from merger
|
2,545
|
|
|
13,452
|
|
Total revenue
|
$
|
1,111
|
|
Net income
|
212
|
|
|
For Years Ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Total revenue
|
$
|
50,213
|
|
|
47,595
|
|
|
50,089
|
|
Net income
|
11,883
|
|
|
10,508
|
|
|
11,505
|
|
|
Basic earnings per common share
|
1.20
|
|
|
1.07
|
|
|
1.16
|
|
|
Diluted earnings per common share
|
1.19
|
|
|
1.05
|
|
|
1.14
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
|||||
2015
|
|
|
|
|
|
|
|
|||||
Investment Securities Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
72,672
|
|
|
309
|
|
|
135
|
|
|
72,846
|
|
U.S. Agency notes
|
140,876
|
|
|
164
|
|
|
1,151
|
|
|
139,889
|
|
|
U.S. Agency mortgage-backed securities
|
29,608
|
|
|
174
|
|
|
404
|
|
|
29,378
|
|
|
Certificates of deposit
|
248
|
|
|
1
|
|
|
—
|
|
|
249
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-taxable
|
103,900
|
|
|
1,713
|
|
|
134
|
|
|
105,479
|
|
|
Taxable
|
26,738
|
|
|
337
|
|
|
134
|
|
|
26,941
|
|
|
Mutual funds
|
2,517
|
|
|
—
|
|
|
51
|
|
|
2,466
|
|
|
Trust preferred securities
|
49
|
|
|
1
|
|
|
—
|
|
|
50
|
|
|
Equity securities
|
659
|
|
|
40
|
|
|
19
|
|
|
680
|
|
|
|
$
|
377,267
|
|
|
2,739
|
|
|
2,028
|
|
|
377,978
|
|
|
|
|
|
|
|
|
|
|||||
Investment Securities Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
22,233
|
|
|
95
|
|
|
97
|
|
|
22,231
|
|
Taxable
|
400
|
|
|
—
|
|
|
1
|
|
|
399
|
|
|
|
$
|
22,633
|
|
|
95
|
|
|
98
|
|
|
22,630
|
|
|
|
|
|
|
|
|
|
|||||
2014
|
|
|
|
|
|
|
|
|||||
Investment Securities Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
62,406
|
|
|
290
|
|
|
136
|
|
|
62,560
|
|
U.S. Agency notes
|
84,661
|
|
|
188
|
|
|
1,212
|
|
|
83,637
|
|
|
U.S. Agency mortgage-backed securities
|
37,838
|
|
|
413
|
|
|
219
|
|
|
38,032
|
|
|
Certificates of deposit
|
3,076
|
|
|
10
|
|
|
—
|
|
|
3,086
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-taxable
|
75,727
|
|
|
1,972
|
|
|
304
|
|
|
77,395
|
|
|
Taxable
|
16,005
|
|
|
465
|
|
|
75
|
|
|
16,395
|
|
|
Mutual funds
|
2,483
|
|
|
—
|
|
|
22
|
|
|
2,461
|
|
|
Trust preferred securities
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
Equity securities
|
1,415
|
|
|
372
|
|
|
38
|
|
|
1,749
|
|
|
|
$
|
283,661
|
|
|
3,710
|
|
|
2,006
|
|
|
285,365
|
|
|
|
|
|
|
|
|
|
|||||
Investment Securities Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
22,525
|
|
|
108
|
|
|
695
|
|
|
21,938
|
|
Taxable
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
|
$
|
22,725
|
|
|
108
|
|
|
695
|
|
|
22,138
|
|
|
Less Than Twelve Months
|
|
Twelve Months or More
|
|||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||
2015
|
|
|
|
|
|
|
|
|||||
Investment Securities Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
32,854
|
|
|
75
|
|
|
4,846
|
|
|
60
|
|
U.S. Agency notes
|
104,053
|
|
|
1,000
|
|
|
9,869
|
|
|
151
|
|
|
U.S. Agency mortgage-backed securities
|
19,190
|
|
|
256
|
|
|
4,068
|
|
|
148
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
||
Non-taxable
|
13,124
|
|
|
74
|
|
|
7,037
|
|
|
60
|
|
|
Taxable
|
15,601
|
|
|
114
|
|
|
880
|
|
|
20
|
|
|
Mutual funds
|
1,215
|
|
|
17
|
|
|
268
|
|
|
34
|
|
|
Equity securities
|
248
|
|
|
12
|
|
|
73
|
|
|
7
|
|
|
|
$
|
186,285
|
|
|
1,548
|
|
|
27,041
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|||||
Investment Securities Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
832
|
|
|
3
|
|
|
3,426
|
|
|
94
|
|
Taxable
|
399
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
|
$
|
1,231
|
|
|
4
|
|
|
3,426
|
|
|
94
|
|
|
|
|
|
|
|
|
|
|||||
2014
|
|
|
|
|
|
|
|
|||||
Investment Securities Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
9,141
|
|
|
7
|
|
|
8,774
|
|
|
129
|
|
U.S. Agency notes
|
—
|
|
|
—
|
|
|
65,971
|
|
|
1,212
|
|
|
U.S. Agency mortgage-backed securities
|
3,795
|
|
|
2
|
|
|
11,456
|
|
|
217
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
7,211
|
|
|
58
|
|
|
11,419
|
|
|
246
|
|
|
Taxable
|
3,117
|
|
|
15
|
|
|
3,668
|
|
|
60
|
|
|
Mutual funds
|
281
|
|
|
12
|
|
|
1,190
|
|
|
10
|
|
|
Trust preferred securities
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Equity securities
|
197
|
|
|
29
|
|
|
123
|
|
|
9
|
|
|
|
$
|
23,792
|
|
|
123
|
|
|
102,601
|
|
|
1,883
|
|
|
|
|
|
|
|
|
|
|||||
Investment Securities Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
8,152
|
|
|
540
|
|
|
4,200
|
|
|
155
|
|
|
$
|
8,152
|
|
|
540
|
|
|
4,200
|
|
|
155
|
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
|||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|||||
Due within one year
|
$
|
23,011
|
|
|
23,159
|
|
|
3,819
|
|
|
3,831
|
|
Due from one to five years
|
182,774
|
|
|
183,597
|
|
|
3,904
|
|
|
3,882
|
|
|
Due from five to ten years
|
138,649
|
|
|
138,648
|
|
|
3,168
|
|
|
3,107
|
|
|
Due after ten years
|
—
|
|
|
—
|
|
|
11,742
|
|
|
11,810
|
|
|
|
344,434
|
|
|
345,404
|
|
|
22,633
|
|
|
22,630
|
|
|
U.S. Agency mortgage-backed securities
|
29,608
|
|
|
29,378
|
|
|
—
|
|
|
—
|
|
|
Mutual funds
|
2,517
|
|
|
2,466
|
|
|
—
|
|
|
—
|
|
|
Trust preferred securities
|
49
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
Equity securities
|
659
|
|
|
680
|
|
|
—
|
|
|
—
|
|
|
|
$
|
377,267
|
|
|
377,978
|
|
|
22,633
|
|
|
22,630
|
|
|
2015
|
|
2014
|
|
2013
|
||||
Proceeds from sales
|
$
|
97,981
|
|
|
67,296
|
|
|
59,284
|
|
Gross realized gains
|
627
|
|
|
252
|
|
|
1,234
|
|
|
Gross realized losses
|
132
|
|
|
103
|
|
|
174
|
|
|
2015
|
|
2014
|
|||
Commercial and industrial
|
$
|
45,275
|
|
|
35,424
|
|
Commercial, secured by real estate
|
419,633
|
|
|
379,141
|
|
|
Residential real estate
|
273,139
|
|
|
254,087
|
|
|
Consumer
|
18,510
|
|
|
18,006
|
|
|
Agricultural
|
13,479
|
|
|
11,472
|
|
|
Other loans, including deposit overdrafts
|
665
|
|
|
680
|
|
|
|
770,701
|
|
|
698,810
|
|
|
Deferred origination costs (fees), net
|
237
|
|
|
146
|
|
|
|
770,938
|
|
|
698,956
|
|
|
Less allowance for loan losses
|
3,129
|
|
|
3,121
|
|
|
Loans-net
|
$
|
767,809
|
|
|
695,835
|
|
|
BNB
|
|
Eaton National
|
|||
Contractually required principal at acquisition
|
$
|
32,174
|
|
|
102,483
|
|
Less fair value adjustment
|
199
|
|
|
1,347
|
|
|
Fair value of acquired loans
|
$
|
31,975
|
|
|
101,136
|
|
|
|
|
|
|
||
Contractual cash flows not expected to be collected
|
$
|
195
|
|
|
1,702
|
|
|
BNB
|
|
Eaton National
|
|||
Contractually required principal at acquisition
|
$
|
3,511
|
|
|
23,414
|
|
Contractual cash flows not expected to be collected (nonaccretable difference)
|
(404
|
)
|
|
(6,088
|
)
|
|
Expected cash flows at acquisition
|
3,107
|
|
|
17,326
|
|
|
Interest component of expected cash flows (accretable discount)
|
(413
|
)
|
|
(2,163
|
)
|
|
Fair value of acquired impaired loans
|
$
|
2,694
|
|
|
15,163
|
|
|
2015
|
|
2014
|
|||
Non-accrual loans:
|
|
|
|
|||
Commercial and industrial
|
$
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
876
|
|
|
4,277
|
|
|
Agricultural
|
48
|
|
|
70
|
|
|
Residential real estate
|
799
|
|
|
1,252
|
|
|
Total non-accrual loans
|
1,723
|
|
|
5,599
|
|
|
Past-due 90 days or more and still accruing
|
559
|
|
|
203
|
|
|
Total non-accrual and past-due 90 days or more and still accruing
|
2,282
|
|
|
5,802
|
|
|
Accruing restructured loans
|
13,723
|
|
|
14,269
|
|
|
Total
|
$
|
16,005
|
|
|
20,071
|
|
|
|
|
|
|||
Percentage of total non-accrual and past-due 90 days or more and still accruing to total loans
|
0.30
|
%
|
|
0.83
|
%
|
|
|
|
|
|
|||
Percentage of total non-accrual, past-due 90 days or more and still accruing, and accruing restructured loans to total loans
|
2.08
|
%
|
|
2.87
|
%
|
|
Commercial
& Industrial
|
|
Commercial,
Secured by
Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Agricultural
|
|
Other
|
|
Total
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of year
|
$
|
129
|
|
|
1,990
|
|
|
926
|
|
|
63
|
|
|
11
|
|
|
2
|
|
|
3,121
|
|
Provision charged to expenses
|
208
|
|
|
955
|
|
|
125
|
|
|
(17
|
)
|
|
55
|
|
|
40
|
|
|
1,366
|
|
|
Losses charged off
|
(100
|
)
|
|
(1,133
|
)
|
|
(304
|
)
|
|
(52
|
)
|
|
(67
|
)
|
|
(74
|
)
|
|
(1,730
|
)
|
|
Recoveries
|
7
|
|
|
96
|
|
|
107
|
|
|
60
|
|
|
67
|
|
|
35
|
|
|
372
|
|
|
Balance, end of year
|
$
|
244
|
|
|
1,908
|
|
|
854
|
|
|
54
|
|
|
66
|
|
|
3
|
|
|
3,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
9
|
|
|
306
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
363
|
|
Collectively evaluated for impairment
|
235
|
|
|
1,602
|
|
|
806
|
|
|
54
|
|
|
66
|
|
|
3
|
|
|
2,766
|
|
|
Acquired credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance, end of year
|
$
|
244
|
|
|
1,908
|
|
|
854
|
|
|
54
|
|
|
66
|
|
|
3
|
|
|
3,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
$
|
370
|
|
|
12,351
|
|
|
1,541
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
14,318
|
|
Collectively evaluated for impairment
|
43,726
|
|
|
399,092
|
|
|
269,001
|
|
|
18,516
|
|
|
13,438
|
|
|
179
|
|
|
743,952
|
|
|
Acquired credit impaired loans
|
1,191
|
|
|
7,877
|
|
|
3,039
|
|
|
27
|
|
|
48
|
|
|
486
|
|
|
12,668
|
|
|
Balance, end of year
|
$
|
45,287
|
|
|
419,320
|
|
|
273,581
|
|
|
18,599
|
|
|
13,486
|
|
|
665
|
|
|
770,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of year
|
$
|
175
|
|
|
2,520
|
|
|
826
|
|
|
66
|
|
|
—
|
|
|
1
|
|
|
3,588
|
|
Provision charged to expenses
|
173
|
|
|
(20
|
)
|
|
712
|
|
|
18
|
|
|
11
|
|
|
36
|
|
|
930
|
|
|
Losses charged off
|
(261
|
)
|
|
(573
|
)
|
|
(652
|
)
|
|
(129
|
)
|
|
—
|
|
|
(79
|
)
|
|
(1,694
|
)
|
|
Recoveries
|
42
|
|
|
63
|
|
|
40
|
|
|
108
|
|
|
—
|
|
|
44
|
|
|
297
|
|
|
Balance, end of year
|
$
|
129
|
|
|
1,990
|
|
|
926
|
|
|
63
|
|
|
11
|
|
|
2
|
|
|
3,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
10
|
|
|
415
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
514
|
|
Collectively evaluated for impairment
|
119
|
|
|
1,273
|
|
|
836
|
|
|
63
|
|
|
11
|
|
|
2
|
|
|
2,304
|
|
|
Acquired credit impaired loans
|
—
|
|
|
302
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|
Balance, end of year
|
$
|
129
|
|
|
1,990
|
|
|
926
|
|
|
63
|
|
|
11
|
|
|
2
|
|
|
3,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
$
|
401
|
|
|
13,022
|
|
|
1,701
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
15,179
|
|
Collectively evaluated for impairment
|
33,941
|
|
|
352,774
|
|
|
249,374
|
|
|
17,954
|
|
|
11,371
|
|
|
167
|
|
|
665,581
|
|
|
Acquired credit impaired loans
|
1,092
|
|
|
12,984
|
|
|
3,425
|
|
|
81
|
|
|
101
|
|
|
513
|
|
|
18,196
|
|
|
Balance, end of year
|
$
|
35,434
|
|
|
378,780
|
|
|
254,500
|
|
|
18,090
|
|
|
11,472
|
|
|
680
|
|
|
698,956
|
|
|
Commercial
& Industrial
|
|
Commercial,
Secured by
Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Agricultural
|
|
Other
|
|
Total
|
||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of year
|
$
|
320
|
|
|
2,296
|
|
|
712
|
|
|
108
|
|
|
—
|
|
|
1
|
|
|
3,437
|
|
Provision charged to expenses
|
(30
|
)
|
|
256
|
|
|
327
|
|
|
12
|
|
|
—
|
|
|
23
|
|
|
588
|
|
|
Losses charged off
|
(119
|
)
|
|
(58
|
)
|
|
(244
|
)
|
|
(181
|
)
|
|
—
|
|
|
(67
|
)
|
|
(669
|
)
|
|
Recoveries
|
4
|
|
|
26
|
|
|
31
|
|
|
127
|
|
|
—
|
|
|
44
|
|
|
232
|
|
|
Balance, end of year
|
$
|
175
|
|
|
2,520
|
|
|
826
|
|
|
66
|
|
|
—
|
|
|
1
|
|
|
3,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
2
|
|
|
760
|
|
|
270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,032
|
|
Collectively evaluated for impairment
|
173
|
|
|
1,760
|
|
|
556
|
|
|
66
|
|
|
—
|
|
|
1
|
|
|
2,556
|
|
|
Balance, end of year
|
$
|
175
|
|
|
2,520
|
|
|
826
|
|
|
66
|
|
|
—
|
|
|
1
|
|
|
3,588
|
|
•
|
Pass – loans categorized in this category are higher quality loans that do not fit any of the other categories described below.
|
•
|
Other Assets Especially Mentioned (OAEM) - loans in this category are currently protected but are potentially weak. These loans constitute a risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an undue risk in light of the circumstances surrounding a specific asset.
|
•
|
Substandard – loans in this category are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that the Company will sustain some loss if the deficiencies are not corrected.
|
•
|
Doubtful – loans classified in this category have all the weaknesses inherent in loans classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
|
|
Pass
|
|
OAEM
|
|
Substandard
|
|
Doubtful
|
|
Total
|
||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
44,596
|
|
|
—
|
|
|
691
|
|
|
—
|
|
|
45,287
|
|
Commercial, secured by real estate
|
397,938
|
|
|
9,316
|
|
|
12,066
|
|
|
—
|
|
|
419,320
|
|
|
Residential real estate
|
267,567
|
|
|
1,935
|
|
|
4,079
|
|
|
—
|
|
|
273,581
|
|
|
Consumer
|
18,528
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
18,599
|
|
|
Agricultural
|
12,246
|
|
|
850
|
|
|
390
|
|
|
—
|
|
|
13,486
|
|
|
Other
|
665
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
665
|
|
|
Total
|
$
|
741,540
|
|
|
12,101
|
|
|
17,297
|
|
|
—
|
|
|
770,938
|
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
34,322
|
|
|
—
|
|
|
1,112
|
|
|
—
|
|
|
35,434
|
|
Commercial, secured by real estate
|
353,957
|
|
|
6,421
|
|
|
18,402
|
|
|
—
|
|
|
378,780
|
|
|
Residential real estate
|
246,335
|
|
|
920
|
|
|
7,245
|
|
|
—
|
|
|
254,500
|
|
|
Consumer
|
17,979
|
|
|
—
|
|
|
111
|
|
|
—
|
|
|
18,090
|
|
|
Agricultural
|
11,273
|
|
|
—
|
|
|
199
|
|
|
—
|
|
|
11,472
|
|
|
Other
|
680
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
680
|
|
|
Total
|
$
|
664,546
|
|
|
7,341
|
|
|
27,069
|
|
|
—
|
|
|
698,956
|
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
Greater Than
90 Days
|
|
Total
Past Due
|
|
Current
|
|
Total Loans
Receivable
|
|
Total Loans Greater Than
90 Days and
Accruing
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,287
|
|
|
45,287
|
|
|
—
|
|
Commercial, secured by real estate
|
73
|
|
|
81
|
|
|
876
|
|
|
1,030
|
|
|
418,290
|
|
|
419,320
|
|
|
—
|
|
|
Residential real estate
|
777
|
|
|
198
|
|
|
1,124
|
|
|
2,099
|
|
|
271,482
|
|
|
273,581
|
|
|
516
|
|
|
Consumer
|
62
|
|
|
7
|
|
|
43
|
|
|
112
|
|
|
18,487
|
|
|
18,599
|
|
|
43
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,486
|
|
|
13,486
|
|
|
—
|
|
|
Other
|
109
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
556
|
|
|
665
|
|
|
—
|
|
|
Total
|
$
|
1,021
|
|
|
286
|
|
|
2,043
|
|
|
3,350
|
|
|
767,588
|
|
|
770,938
|
|
|
559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
35,430
|
|
|
35,434
|
|
|
—
|
|
Commercial, secured by real estate
|
1,000
|
|
|
83
|
|
|
3,179
|
|
|
4,262
|
|
|
374,518
|
|
|
378,780
|
|
|
9
|
|
|
Residential real estate
|
648
|
|
|
297
|
|
|
1,289
|
|
|
2,234
|
|
|
252,266
|
|
|
254,500
|
|
|
177
|
|
|
Consumer
|
59
|
|
|
28
|
|
|
17
|
|
|
104
|
|
|
17,986
|
|
|
18,090
|
|
|
17
|
|
|
Agricultural
|
73
|
|
|
70
|
|
|
—
|
|
|
143
|
|
|
11,329
|
|
|
11,472
|
|
|
—
|
|
|
Other
|
106
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|
574
|
|
|
680
|
|
|
—
|
|
|
Total
|
$
|
1,890
|
|
|
478
|
|
|
4,485
|
|
|
6,853
|
|
|
692,103
|
|
|
698,956
|
|
|
203
|
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
1,205
|
|
|
1,500
|
|
|
—
|
|
|
1,467
|
|
|
206
|
|
Commercial, secured by real estate
|
16,345
|
|
|
18,335
|
|
|
—
|
|
|
18,575
|
|
|
2,229
|
|
|
Residential real estate
|
3,734
|
|
|
5,055
|
|
|
—
|
|
|
4,092
|
|
|
453
|
|
|
Consumer
|
81
|
|
|
109
|
|
|
—
|
|
|
106
|
|
|
25
|
|
|
Agricultural
|
48
|
|
|
151
|
|
|
—
|
|
|
81
|
|
|
487
|
|
|
Other
|
486
|
|
|
701
|
|
|
—
|
|
|
510
|
|
|
82
|
|
|
Total
|
$
|
21,899
|
|
|
25,851
|
|
|
—
|
|
|
24,831
|
|
|
3,482
|
|
|
|
|
|
|
|
|
|
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
356
|
|
|
356
|
|
|
9
|
|
|
370
|
|
|
21
|
|
Commercial, secured by real estate
|
3,883
|
|
|
4,014
|
|
|
306
|
|
|
4,007
|
|
|
114
|
|
|
Residential real estate
|
846
|
|
|
958
|
|
|
48
|
|
|
864
|
|
|
37
|
|
|
Consumer
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
5,087
|
|
|
5,329
|
|
|
363
|
|
|
5,241
|
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
1,561
|
|
|
1,856
|
|
|
9
|
|
|
1,837
|
|
|
227
|
|
Commercial, secured by real estate
|
20,228
|
|
|
22,349
|
|
|
306
|
|
|
22,582
|
|
|
2,343
|
|
|
Residential real estate
|
4,580
|
|
|
6,013
|
|
|
48
|
|
|
4,956
|
|
|
490
|
|
|
Consumer
|
83
|
|
|
110
|
|
|
—
|
|
|
106
|
|
|
25
|
|
|
Agricultural
|
48
|
|
|
151
|
|
|
—
|
|
|
81
|
|
|
487
|
|
|
Other
|
486
|
|
|
701
|
|
|
—
|
|
|
510
|
|
|
82
|
|
|
Total
|
$
|
26,986
|
|
|
31,180
|
|
|
363
|
|
|
30,072
|
|
|
3,654
|
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
1,092
|
|
|
2,077
|
|
|
—
|
|
|
1,823
|
|
|
161
|
|
Commercial, secured by real estate
|
21,822
|
|
|
26,715
|
|
|
—
|
|
|
23,360
|
|
|
1,373
|
|
|
Residential real estate
|
4,057
|
|
|
5,549
|
|
|
—
|
|
|
4,645
|
|
|
379
|
|
|
Consumer
|
117
|
|
|
178
|
|
|
—
|
|
|
179
|
|
|
14
|
|
|
Agricultural
|
101
|
|
|
619
|
|
|
—
|
|
|
121
|
|
|
20
|
|
|
Other
|
513
|
|
|
744
|
|
|
—
|
|
|
550
|
|
|
43
|
|
|
Total
|
$
|
27,702
|
|
|
35,882
|
|
|
—
|
|
|
30,678
|
|
|
1,990
|
|
|
|
|
|
|
|
|
|
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
401
|
|
|
406
|
|
|
10
|
|
|
319
|
|
|
19
|
|
Commercial, secured by real estate
|
4,184
|
|
|
4,538
|
|
|
717
|
|
|
4,108
|
|
|
117
|
|
|
Residential real estate
|
1,069
|
|
|
1,265
|
|
|
90
|
|
|
1,026
|
|
|
44
|
|
|
Consumer
|
19
|
|
|
20
|
|
|
—
|
|
|
18
|
|
|
2
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
5,673
|
|
|
6,229
|
|
|
817
|
|
|
5,471
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
1,493
|
|
|
2,483
|
|
|
10
|
|
|
2,142
|
|
|
180
|
|
Commercial, secured by real estate
|
26,006
|
|
|
31,253
|
|
|
717
|
|
|
27,468
|
|
|
1,490
|
|
|
Residential real estate
|
5,126
|
|
|
6,814
|
|
|
90
|
|
|
5,671
|
|
|
423
|
|
|
Consumer
|
136
|
|
|
198
|
|
|
—
|
|
|
197
|
|
|
16
|
|
|
Agricultural
|
101
|
|
|
619
|
|
|
—
|
|
|
121
|
|
|
20
|
|
|
Other
|
513
|
|
|
744
|
|
|
—
|
|
|
550
|
|
|
43
|
|
|
Total
|
$
|
33,375
|
|
|
42,111
|
|
|
817
|
|
|
36,149
|
|
|
2,172
|
|
|
Recorded
Investment |
|
Unpaid
Principal Balance |
|
Related
Allowance |
|
Average
Recorded Investment |
|
Interest
Income Recognized |
||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
332
|
|
|
531
|
|
|
—
|
|
|
700
|
|
|
35
|
|
Commercial, secured by real estate
|
10,883
|
|
|
12,317
|
|
|
—
|
|
|
11,612
|
|
|
748
|
|
|
Residential real estate
|
2,096
|
|
|
2,967
|
|
|
—
|
|
|
2,345
|
|
|
182
|
|
|
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
6
|
|
|
Total
|
$
|
13,311
|
|
|
15,815
|
|
|
—
|
|
|
14,677
|
|
|
971
|
|
|
|
|
|
|
|
|
|
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
165
|
|
|
270
|
|
|
2
|
|
|
186
|
|
|
2
|
|
Commercial, secured by real estate
|
7,725
|
|
|
7,725
|
|
|
760
|
|
|
7,368
|
|
|
252
|
|
|
Residential real estate
|
1,645
|
|
|
1,663
|
|
|
270
|
|
|
1,123
|
|
|
44
|
|
|
Consumer
|
27
|
|
|
27
|
|
|
—
|
|
|
17
|
|
|
2
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
9,562
|
|
|
9,685
|
|
|
1,032
|
|
|
8,694
|
|
|
300
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
497
|
|
|
801
|
|
|
2
|
|
|
886
|
|
|
37
|
|
Commercial, secured by real estate
|
18,608
|
|
|
20,042
|
|
|
760
|
|
|
18,980
|
|
|
1,000
|
|
|
Residential real estate
|
3,741
|
|
|
4,630
|
|
|
270
|
|
|
3,468
|
|
|
226
|
|
|
Consumer
|
27
|
|
|
27
|
|
|
—
|
|
|
24
|
|
|
2
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
6
|
|
|
Total
|
$
|
22,873
|
|
|
25,500
|
|
|
1,032
|
|
|
23,371
|
|
|
1,271
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||||||||||||||
|
Number
of Loans |
|
Pre-Modification Recorded Balance
|
|
Post-Modification Recorded Balance
|
|
Number
of Loans |
|
Pre-Modification Recorded Balance
|
|
Post-Modification Recorded Balance
|
|
Number
of Loans |
|
Pre-Modification Recorded Balance
|
|
Post-Modification Recorded Balance
|
|||||||||||||||
Commercial and industrial
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
8
|
|
|
$
|
658
|
|
|
$
|
340
|
|
|
1
|
|
|
$
|
22
|
|
|
$
|
22
|
|
Commercial, secured by real estate
|
1
|
|
|
75
|
|
|
74
|
|
|
2
|
|
|
896
|
|
|
1,214
|
|
|
3
|
|
|
1,594
|
|
|
1,594
|
|
||||||
Residential real estate
|
7
|
|
|
217
|
|
|
221
|
|
|
2
|
|
|
82
|
|
|
82
|
|
|
6
|
|
|
508
|
|
|
508
|
|
||||||
Consumer
|
2
|
|
|
9
|
|
|
9
|
|
|
3
|
|
|
40
|
|
|
40
|
|
|
2
|
|
|
27
|
|
|
27
|
|
||||||
|
10
|
|
|
$
|
301
|
|
|
$
|
304
|
|
|
15
|
|
|
$
|
1,676
|
|
|
$
|
1,676
|
|
|
12
|
|
|
$
|
2,151
|
|
|
$
|
2,151
|
|
|
2015
|
|
2014
|
|
2013
|
||||
Balance, beginning of year
|
$
|
591
|
|
|
498
|
|
|
475
|
|
Amount capitalized to mortgage servicing rights
|
78
|
|
|
292
|
|
|
191
|
|
|
Amortization of mortgage servicing rights
|
(181
|
)
|
|
(199
|
)
|
|
(168
|
)
|
|
Balance, end of year
|
$
|
488
|
|
|
591
|
|
|
498
|
|
|
2015
|
|
2014
|
|||
Commercial & industrial
|
$
|
1,191
|
|
|
1,092
|
|
Commercial, secured by real estate
|
7,877
|
|
|
12,984
|
|
|
Residential real estate
|
3,039
|
|
|
3,425
|
|
|
Consumer
|
27
|
|
|
81
|
|
|
Agricultural
|
48
|
|
|
101
|
|
|
Other loans, including deposit overdrafts
|
486
|
|
|
513
|
|
|
|
12,668
|
|
|
18,196
|
|
|
Less allowance for loan losses
|
—
|
|
|
303
|
|
|
Loans, net
|
$
|
12,668
|
|
|
17,893
|
|
|
2015
|
|
2014
|
|||
Outstanding balance
|
$
|
16,507
|
|
|
26,697
|
|
Carrying amount
|
12,668
|
|
|
18,196
|
|
|
2015
|
|
2014
|
||||
Accretable discount, beginning of year
|
$
|
2,674
|
|
|
1,107
|
|
|
Accretable discount acquired during period
|
413
|
|
|
2,163
|
|
||
Reclass from nonaccretable discount to accretable discount
|
983
|
|
|
177
|
|
||
Less disposals
|
(850
|
)
|
|
(249
|
)
|
||
Less accretion
|
(1,717
|
)
|
|
(524
|
)
|
||
Accretable discount, end of year
|
$
|
1,503
|
|
|
$
|
2,674
|
|
|
2015
|
|
2014
|
|||
Balance, beginning of year
|
$
|
1,370
|
|
|
1,463
|
|
Additions
|
99
|
|
|
480
|
|
|
Additions due to merger
|
—
|
|
|
262
|
|
|
Reductions due to sales
|
(205
|
)
|
|
(735
|
)
|
|
Reductions due to valuation write downs
|
(418
|
)
|
|
(100
|
)
|
|
Balance, end of year
|
$
|
846
|
|
|
1,370
|
|
|
2015
|
|
2014
|
|||
Commercial real estate
|
$
|
846
|
|
|
1,265
|
|
Residential real estate
|
—
|
|
|
105
|
|
|
|
$
|
846
|
|
|
1,370
|
|
|
2015
|
|
2014
|
|||
Land
|
$
|
6,660
|
|
|
6,045
|
|
Buildings
|
21,463
|
|
|
19,728
|
|
|
Equipment
|
13,005
|
|
|
12,627
|
|
|
Construction in progress
|
9
|
|
|
49
|
|
|
Total
|
41,137
|
|
|
38,449
|
|
|
Less accumulated depreciation
|
19,037
|
|
|
17,716
|
|
|
Premises and equipment, net
|
$
|
22,100
|
|
|
20,733
|
|
2016
|
$
|
479
|
|
2017
|
370
|
|
|
2018
|
264
|
|
|
2019
|
221
|
|
|
2020
|
38
|
|
|
Thereafter
|
3,834
|
|
|
Total
|
$
|
5,206
|
|
|
2015
|
|
2014
|
|||
Balance, beginning of year
|
$
|
27,638
|
|
|
14,186
|
|
Additions from acquisitions
|
2,545
|
|
|
13,452
|
|
|
Balance, end of year
|
$
|
30,183
|
|
|
27,638
|
|
|
2015
|
|
2014
|
|||||||||||||||
|
Gross
Intangible
Assets
|
|
Accumulated
Amortization
|
|
Net
Intangible
Assets
|
|
Gross
Intangible Assets |
|
Accumulated
Amortization |
|
Net
Intangible Assets |
|||||||
Core deposit intangibles
|
$
|
6,458
|
|
|
1,550
|
|
|
4,908
|
|
|
5,040
|
|
|
851
|
|
|
4,189
|
|
Mortgage servicing rights
|
1,496
|
|
|
1,008
|
|
|
488
|
|
|
1,418
|
|
|
827
|
|
|
591
|
|
|
Total
|
$
|
7,954
|
|
|
2,558
|
|
|
5,396
|
|
|
6,458
|
|
|
1,678
|
|
|
4,780
|
|
2016
|
$
|
884
|
|
2017
|
857
|
|
|
2018
|
837
|
|
|
2019
|
821
|
|
|
2020
|
804
|
|
|
2015
|
|
2014
|
|||
Affordable housing tax credit investment
|
$
|
1,000
|
|
|
—
|
|
Less amortization
|
12
|
|
|
—
|
|
|
Net affordable housing tax credit investment
|
$
|
988
|
|
|
—
|
|
|
|
|
|
|||
Unfunded commitment
|
$
|
907
|
|
|
—
|
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Tax credits and other tax benefits recognized
|
$
|
14
|
|
|
—
|
|
|
—
|
|
Tax credit amortization expense included in provision for income taxes
|
12
|
|
|
—
|
|
|
—
|
|
2016
|
$
|
85,904
|
|
2017
|
31,822
|
|
|
2018
|
25,670
|
|
|
2019
|
21,575
|
|
|
2020
|
48,742
|
|
|
Thereafter
|
4,242
|
|
|
|
$
|
217,955
|
|
|
Outstanding Balance
|
|
Average Rate
|
|||
December 31, 2015
|
|
|
|
|||
2016
|
$
|
349
|
|
|
2.82
|
%
|
2017
|
5,295
|
|
|
5.11
|
%
|
|
2018
|
248
|
|
|
2.82
|
%
|
|
2019
|
55
|
|
|
2.82
|
%
|
|
2020
|
—
|
|
|
—
|
%
|
|
Thereafter
|
—
|
|
|
—
|
%
|
|
Total
|
$
|
5,947
|
|
|
4.86
|
%
|
|
|
|
|
|||
December 31, 2014
|
|
|
|
|||
2015
|
$
|
5,410
|
|
|
2.06
|
%
|
2016
|
349
|
|
|
2.82
|
%
|
|
2017
|
5,295
|
|
|
5.11
|
%
|
|
2018
|
248
|
|
|
2.82
|
%
|
|
2019
|
55
|
|
|
2.82
|
%
|
|
Thereafter
|
—
|
|
|
—
|
%
|
|
Total
|
$
|
11,357
|
|
|
3.53
|
%
|
|
2015
|
|
2014
|
||||||||||
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
||||||
Line of credit
|
$
|
13,187
|
|
|
1.00
|
%
|
|
$
|
5,021
|
|
|
0.75
|
%
|
FHLB short-term advance
|
10,000
|
|
|
0.35
|
%
|
|
—
|
|
|
—
|
%
|
||
Repurchase agreements
|
14,200
|
|
|
0.10
|
%
|
|
11,624
|
|
|
0.10
|
%
|
||
|
$
|
37,387
|
|
|
0.48
|
%
|
|
$
|
16,645
|
|
|
0.30
|
%
|
|
2015
|
|
2014
|
|
2013
|
||||
Income taxes currently payable
|
$
|
4,280
|
|
|
3,194
|
|
|
2,750
|
|
Deferred income tax provision (benefit)
|
(58
|
)
|
|
192
|
|
|
192
|
|
|
Provision for income taxes
|
$
|
4,222
|
|
|
3,386
|
|
|
2,942
|
|
|
2015
|
|
2014
|
|||
Deferred tax assets:
|
|
|
|
|||
Allowance for loan losses
|
$
|
1,064
|
|
|
1,061
|
|
Net unrealized losses on investment securities available-for-sale
|
246
|
|
|
470
|
|
|
Fair value adjustment on loans acquired from merger with First Capital
|
847
|
|
|
1,184
|
|
|
Write-down of other real estate owned
|
338
|
|
|
196
|
|
|
Pension and deferred compensation
|
971
|
|
|
849
|
|
|
Other
|
440
|
|
|
274
|
|
|
|
3,906
|
|
|
4,034
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
Depreciation of premises and equipment
|
(1,332
|
)
|
|
(1,280
|
)
|
|
Amortization of intangibles
|
(840
|
)
|
|
(950
|
)
|
|
Deferred loan fees
|
(2
|
)
|
|
(3
|
)
|
|
FHLB stock dividends
|
(349
|
)
|
|
(349
|
)
|
|
Fair value adjustment on securities acquired from merger with First Capital
|
(70
|
)
|
|
(143
|
)
|
|
|
(2,593
|
)
|
|
(2,725
|
)
|
|
Net deferred tax assets (liabilities)
|
$
|
1,313
|
|
|
1,309
|
|
|
2015
|
|
2014
|
|||
Commitments to extend credit:
|
|
|
|
|||
Commercial loans
|
$
|
8,160
|
|
|
5,152
|
|
Other loans:
|
|
|
|
|||
Fixed rate
|
2,293
|
|
|
877
|
|
|
Adjustable rate
|
1,362
|
|
|
2,011
|
|
|
Unused lines of credit:
|
|
|
|
|||
Fixed rate
|
6,378
|
|
|
6,496
|
|
|
Adjustable rate
|
90,153
|
|
|
67,981
|
|
|
Unused overdraft protection amounts on demand and NOW accounts
|
10,057
|
|
|
10,206
|
|
|
Standby letters of credit
|
457
|
|
|
563
|
|
|
|
$
|
118,860
|
|
|
93,286
|
|
|
Minimum
Requirement
|
|
To Be Considered
Well-Capitalized
|
||
Ratio of Common Equity Tier 1 Capital to risk-weighted assets
|
4.5
|
%
|
|
6.5
|
%
|
Ratio of tier 1 capital to risk-weighted assets
|
6.0
|
%
|
|
8.0
|
%
|
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets
|
8.0
|
%
|
|
10.0
|
%
|
Leverage ratio (tier 1 capital to adjusted quarterly average total assets)
|
4.0
|
%
|
|
5.0
|
%
|
|
2015
|
|
2014
|
|||||||||
|
Consolidated
Company
|
|
Bank
|
|
Consolidated
Company
|
|
Bank
|
|||||
Regulatory Capital:
|
|
|
|
|
|
|
|
|||||
Shareholders' equity
|
$
|
140,108
|
|
|
138,396
|
|
|
125,695
|
|
|
119,350
|
|
Goodwill and other intangible assets
|
(32,146
|
)
|
|
(32,146
|
)
|
|
(31,886
|
)
|
|
(31,886
|
)
|
|
Accumulated other comprehensive (income) loss
|
(256
|
)
|
|
(261
|
)
|
|
(785
|
)
|
|
(583
|
)
|
|
Tier 1 risk-based capital
|
107,706
|
|
|
105,989
|
|
|
93,024
|
|
|
86,881
|
|
|
Eligible allowance for loan losses
|
3,129
|
|
|
3,129
|
|
|
3,121
|
|
|
3,121
|
|
|
Total risk-based capital
|
$
|
110,835
|
|
|
109,118
|
|
|
96,145
|
|
|
90,002
|
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 Capital to risk-weighted assets
|
13.46
|
%
|
|
13.26
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Tier 1 capital to risk-weighted assets
|
13.46
|
%
|
|
13.26
|
%
|
|
13.92
|
%
|
|
13.03
|
%
|
|
Total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets
|
13.85
|
%
|
|
13.65
|
%
|
|
14.38
|
%
|
|
13.50
|
%
|
|
Leverage ratio (tier 1 capital to adjusted quarterly average total assets)
|
8.62
|
%
|
|
8.49
|
%
|
|
8.53
|
%
|
|
7.98
|
%
|
|
2015
|
|
2014
|
|||||||||||||||
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Changes in Pension Plan Assets and Benefit Obligations
|
|
Total
|
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Changes in Pension Plan Assets and Benefit Obligations
|
|
Total
|
|||||||
Balance at beginning of year
|
$
|
1,126
|
|
|
(341
|
)
|
|
785
|
|
|
(1,641
|
)
|
|
(81
|
)
|
|
(1,722
|
)
|
Before reclassifications
|
(330
|
)
|
|
108
|
|
|
(222
|
)
|
|
2,865
|
|
|
(260
|
)
|
|
2,605
|
|
|
Reclassifications
|
(327
|
)
|
|
—
|
|
|
(327
|
)
|
|
(98
|
)
|
|
—
|
|
|
(98
|
)
|
|
Balance at end of year
|
$
|
469
|
|
|
(233
|
)
|
|
236
|
|
|
1,126
|
|
|
(341
|
)
|
|
785
|
|
|
2015
|
|
2014
|
|
Affected Line Item in the Consolidated Statements of Income
|
|||
Realized gain on sales of securities
|
$
|
495
|
|
|
149
|
|
|
Net gain on sale of securities
|
Less provision for income taxes
|
168
|
|
|
51
|
|
|
Provision for income taxes
|
|
Reclassification adjustment, net of taxes
|
$
|
327
|
|
|
98
|
|
|
|
Legal name
|
|
Pentegra Defined Benefit Plan for Financial Institutions
|
Plan's employer identification number
|
|
13-5645888
|
Plan number
|
|
333
|
|
2015
|
|
2014
|
|
2013
|
||||
Qualified noncontributory defined benefit retirement plan
|
$
|
984
|
|
|
967
|
|
|
486
|
|
401(k) plan
|
346
|
|
|
326
|
|
|
294
|
|
|
2015
|
|
2014
|
|
2013
|
||||
Service cost
|
$
|
38
|
|
|
68
|
|
|
71
|
|
Interest cost
|
68
|
|
|
60
|
|
|
46
|
|
|
Amortization of unrecognized (gain) loss
|
171
|
|
|
—
|
|
|
25
|
|
|
Amortization of unrecognized prior service cost
|
—
|
|
|
15
|
|
|
29
|
|
|
Net periodic pension cost
|
$
|
277
|
|
|
143
|
|
|
171
|
|
|
2015
|
|
2014
|
|
2013
|
||||
Projected benefit obligation at beginning of year
|
$
|
1,741
|
|
|
1,213
|
|
|
1,153
|
|
Service cost
|
38
|
|
|
68
|
|
|
71
|
|
|
Interest cost
|
68
|
|
|
60
|
|
|
46
|
|
|
Actuarial (gain) or loss
|
10
|
|
|
407
|
|
|
(57
|
)
|
|
Benefits paid
|
(14
|
)
|
|
(7
|
)
|
|
—
|
|
|
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
Curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
Projected benefit obligation at end of year
|
$
|
1,843
|
|
|
1,741
|
|
|
1,213
|
|
|
2015
|
|
2014
|
|
2013
|
||||
Net actuarial (gain)/loss
|
$
|
233
|
|
|
339
|
|
|
70
|
|
Past service cost
|
—
|
|
|
—
|
|
|
10
|
|
|
|
$
|
233
|
|
|
339
|
|
|
80
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Benefit obligation:
|
|
|
|
|
|
|||
Discount rate
|
4.34
|
%
|
|
3.95
|
%
|
|
4.95
|
%
|
Salary increase rate
|
2.00
|
%
|
|
2.00
|
%
|
|
3.00
|
%
|
|
|
|
|
|
|
|||
Net periodic pension cost:
|
|
|
|
|
|
|
|
|
Discount rate
|
3.95
|
%
|
|
4.95
|
%
|
|
4.05
|
%
|
Salary increase rate
|
2.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
Amortization period in years
|
1.98
|
|
|
3.95
|
|
|
2.99
|
|
2016
|
$
|
75
|
|
2017
|
138
|
|
|
2018
|
138
|
|
|
2019
|
137
|
|
|
2020
|
137
|
|
|
2021-2025
|
678
|
|
|
|
Outstanding Stock Options
|
|
Exercisable Stock Options
|
||||||||||||||
Exercise
Price Range
|
|
Number
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
|
Number
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
||||||
$9.00 - 10.99
|
|
17,633
|
|
|
$
|
9.00
|
|
|
3.1
|
|
17,633
|
|
|
$
|
9.00
|
|
|
3.1
|
$11.00 - 12.99
|
|
53,266
|
|
|
12.04
|
|
|
4.6
|
|
44,477
|
|
|
12.00
|
|
|
4.4
|
||
$17.00 - 18.99
|
|
12,962
|
|
|
18.41
|
|
|
0.6
|
|
12,962
|
|
|
18.41
|
|
|
0.6
|
||
|
|
83,861
|
|
|
12.39
|
|
|
3.7
|
|
75,072
|
|
|
12.40
|
|
|
3.4
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||
|
Options |
|
Weighted
Average Exercise Price |
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Options |
|
Weighted
Average Exercise Price |
||||||||
Outstanding at January 1,
|
99,810
|
|
|
12.16
|
|
|
104,966
|
|
|
$
|
12.43
|
|
|
110,586
|
|
|
$
|
12.42
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(13,449
|
)
|
|
11.31
|
|
|
—
|
|
|
—
|
|
|
(5,620
|
)
|
|
12.32
|
|
||
Expired
|
(2,500
|
)
|
|
9.00
|
|
|
(5,156
|
)
|
|
17.66
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31,
|
83,861
|
|
|
12.39
|
|
|
99,810
|
|
|
12.16
|
|
|
104,966
|
|
|
12.43
|
|
||
Exercisable at December 31,
|
75,072
|
|
|
12.40
|
|
|
79,909
|
|
|
12.18
|
|
|
67,899
|
|
|
12.86
|
|
|
2015
|
|
2014
|
|
2013
|
||||
Intrinsic value of options exercised
|
$
|
67
|
|
|
—
|
|
|
41
|
|
Cash received from options exercised
|
152
|
|
|
—
|
|
|
70
|
|
|
Tax benefit realized from options exercised
|
13
|
|
|
—
|
|
|
12
|
|
|
2015
|
|||||
|
Shares |
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at January 1,
|
—
|
|
|
$
|
—
|
|
Granted
|
16,038
|
|
|
15.47
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding at December 31,
|
16,038
|
|
|
$
|
15.47
|
|
|
2015
|
|
2014
|
|
2013
|
||||
Net income
|
$
|
11,474
|
|
|
9,869
|
|
|
8,780
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding used in the calculation of basic earnings per common share
|
9,704,965
|
|
|
9,297,019
|
|
|
7,852,514
|
|
|
|
|
|
|
|
|
||||
Add dilutive effect of:
|
|
|
|
|
|
|
|
|
|
Stock options
|
17,174
|
|
|
18,545
|
|
|
23,456
|
|
|
Stock warrants
|
89,328
|
|
|
90,782
|
|
|
107,027
|
|
|
Restricted shares
|
9
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
||||
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share
|
9,811,476
|
|
|
9,406,346
|
|
|
7,982,997
|
|
|
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.18
|
|
|
1.06
|
|
|
1.12
|
|
Diluted
|
1.17
|
|
|
1.05
|
|
|
1.10
|
|
|
2015
|
|
2014
|
|||
Beginning balance
|
$
|
1,192
|
|
|
1,001
|
|
Additions
|
106
|
|
|
594
|
|
|
Reductions
|
(207
|
)
|
|
(403
|
)
|
|
Ending Balance
|
$
|
1,091
|
|
|
1,192
|
|
|
|
|
Fair Value Measurements at the End of
the Reporting Period Using
|
|||||||||
|
Fair Value
Measurements
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
|||||
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
72,846
|
|
|
72,846
|
|
|
—
|
|
|
—
|
|
U.S. Agency notes
|
139,889
|
|
|
—
|
|
|
139,889
|
|
|
—
|
|
|
U.S. Agency mortgage-backed securities
|
29,378
|
|
|
—
|
|
|
29,378
|
|
|
—
|
|
|
Certificates of deposit
|
249
|
|
|
—
|
|
|
249
|
|
|
—
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-taxable
|
105,479
|
|
|
—
|
|
|
105,479
|
|
|
—
|
|
|
Taxable
|
26,941
|
|
|
—
|
|
|
26,941
|
|
|
—
|
|
|
Mutual funds
|
2,466
|
|
|
1,466
|
|
|
1,000
|
|
|
—
|
|
|
Trust preferred securities
|
50
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
Equity securities
|
680
|
|
|
680
|
|
|
—
|
|
|
—
|
|
|
Total recurring fair value measurements
|
$
|
377,978
|
|
|
75,042
|
|
|
302,936
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
$
|
4,722
|
|
|
—
|
|
|
—
|
|
|
4,722
|
|
Other real estate owned and repossessed assets
|
846
|
|
|
—
|
|
|
—
|
|
|
846
|
|
|
Total nonrecurring fair value measurements
|
$
|
5,568
|
|
|
—
|
|
|
—
|
|
|
5,568
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurement:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury notes
|
$
|
62,560
|
|
|
62,560
|
|
|
—
|
|
|
—
|
|
U.S. Agency notes
|
83,637
|
|
|
—
|
|
|
83,637
|
|
|
—
|
|
|
U.S. Agency mortgage-backed securities
|
38,032
|
|
|
—
|
|
|
38,032
|
|
|
—
|
|
|
Certificates of deposit with other banks
|
3,086
|
|
|
—
|
|
|
3,086
|
|
|
—
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-taxable
|
77,395
|
|
|
—
|
|
|
77,395
|
|
|
—
|
|
|
Taxable
|
16,395
|
|
|
—
|
|
|
16,395
|
|
|
—
|
|
|
Mutual funds
|
2,461
|
|
|
1,461
|
|
|
1,000
|
|
|
—
|
|
|
Trust preferred securities
|
50
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
Equity securities
|
1,749
|
|
|
1,749
|
|
|
—
|
|
|
—
|
|
|
Total recurring fair value measurements
|
$
|
285,365
|
|
|
65,820
|
|
|
219,545
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
$
|
4,872
|
|
|
—
|
|
|
—
|
|
|
4,872
|
|
Other real estate owned and repossessed assets
|
1,370
|
|
|
—
|
|
|
—
|
|
|
1,370
|
|
|
Total nonrecurring fair value measurements
|
$
|
6,242
|
|
|
—
|
|
|
—
|
|
|
6,242
|
|
|
|
|
|
|
|
|
|
Range
|
|||||||||
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
High
|
|
Low
|
|
Weighted Average
|
|||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impaired loans
|
|
$
|
4,722
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
|||||||
|
|
|
|
Discounted cash flows
|
|
Discount rate
|
|
11.00
|
%
|
|
4.00
|
%
|
|
5.27
|
%
|
||
Other real estate owned
|
|
846
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impaired loans
|
|
$
|
4,872
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
|||||||
|
|
|
|
Discounted cash flows
|
|
Discount rate
|
|
10.50%
|
|
4.00%
|
|
5.36%
|
|||||
Other real estate owned
|
|
1,370
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at the End of
the Reporting Period Using |
||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Quoted
Prices in Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
14,987
|
|
|
14,987
|
|
|
14,987
|
|
|
—
|
|
|
—
|
|
Investment securities, held-to-maturity
|
22,633
|
|
|
22,630
|
|
|
—
|
|
|
—
|
|
|
22,630
|
|
|
Federal Reserve Bank stock
|
2,732
|
|
|
2,732
|
|
|
2,732
|
|
|
—
|
|
|
—
|
|
|
Federal Home Loan Bank stock
|
3,638
|
|
|
3,638
|
|
|
3,638
|
|
|
—
|
|
|
—
|
|
|
Loans, net
|
767,809
|
|
|
761,388
|
|
|
—
|
|
|
—
|
|
|
761,388
|
|
|
Accrued interest receivable
|
3,380
|
|
|
3,380
|
|
|
208
|
|
|
1,280
|
|
|
1,892
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
1,087,160
|
|
|
1,087,914
|
|
|
869,940
|
|
|
217,974
|
|
|
—
|
|
|
Short-term borrowings
|
37,387
|
|
|
37,387
|
|
|
37,387
|
|
|
—
|
|
|
—
|
|
|
Long-term debt
|
5,947
|
|
|
6,290
|
|
|
—
|
|
|
6,290
|
|
|
—
|
|
|
Accrued interest payable
|
345
|
|
|
345
|
|
|
16
|
|
|
329
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2014
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
15,845
|
|
|
15,845
|
|
|
15,845
|
|
|
—
|
|
|
—
|
|
Investment securities, held-to-maturity
|
22,725
|
|
|
22,138
|
|
|
—
|
|
|
—
|
|
|
22,138
|
|
|
Federal Reserve Bank stock
|
2,346
|
|
|
2,346
|
|
|
2,346
|
|
|
—
|
|
|
—
|
|
|
Federal Home Loan Bank stock
|
3,638
|
|
|
3,638
|
|
|
3,638
|
|
|
—
|
|
|
—
|
|
|
Loans, net
|
695,835
|
|
|
699,715
|
|
|
—
|
|
|
—
|
|
|
699,715
|
|
|
Accrued interest receivable
|
2,849
|
|
|
2,849
|
|
|
178
|
|
|
885
|
|
|
1,786
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
946,205
|
|
|
947,541
|
|
|
731,766
|
|
|
215,775
|
|
|
—
|
|
|
Short-term borrowings
|
16,645
|
|
|
16,645
|
|
|
16,645
|
|
|
—
|
|
|
—
|
|
|
Long-term debt
|
11,357
|
|
|
11,944
|
|
|
—
|
|
|
11,944
|
|
|
—
|
|
|
Accrued interest payable
|
413
|
|
|
413
|
|
|
13
|
|
|
400
|
|
|
—
|
|
|
Three Months Ended
|
|||||||||||
|
March 31
|
|
June 30
|
|
Sep. 30
|
|
Dec. 31
|
|||||
2015
|
|
|
|
|
|
|
|
|||||
Interest income
|
$
|
10,090
|
|
|
11,348
|
|
|
10,409
|
|
|
10,812
|
|
Interest expense
|
762
|
|
|
748
|
|
|
912
|
|
|
906
|
|
|
Net interest income
|
9,328
|
|
|
10,600
|
|
|
9,497
|
|
|
9,906
|
|
|
Provision for loan losses
|
69
|
|
|
677
|
|
|
240
|
|
|
380
|
|
|
Net interest income after provision
|
9,259
|
|
|
9,923
|
|
|
9,257
|
|
|
9,526
|
|
|
Total non-interest income
|
2,306
|
|
|
2,831
|
|
|
2,386
|
|
|
2,600
|
|
|
Total non-interest expenses
|
7,649
|
|
|
8,426
|
|
|
8,088
|
|
|
8,229
|
|
|
Income before income taxes
|
3,916
|
|
|
4,328
|
|
|
3,555
|
|
|
3,897
|
|
|
Provision for income taxes
|
1,082
|
|
|
1,205
|
|
|
922
|
|
|
1,013
|
|
|
Net income
|
$
|
2,834
|
|
|
3,123
|
|
|
2,633
|
|
|
2,884
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.30
|
|
|
0.33
|
|
|
0.26
|
|
|
0.29
|
|
Diluted
|
0.30
|
|
|
0.32
|
|
|
0.26
|
|
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
|
9,278
|
|
|
9,926
|
|
|
9,906
|
|
|
10,367
|
|
Interest expense
|
915
|
|
|
920
|
|
|
911
|
|
|
844
|
|
|
Net interest income
|
8,363
|
|
|
9,006
|
|
|
8,995
|
|
|
9,523
|
|
|
Provision for loan losses
|
81
|
|
|
255
|
|
|
401
|
|
|
193
|
|
|
Net interest income after provision
|
8,282
|
|
|
8,751
|
|
|
8,594
|
|
|
9,330
|
|
|
Total non-interest income
|
2,077
|
|
|
2,301
|
|
|
2,315
|
|
|
2,449
|
|
|
Total non-interest expenses
|
8,672
|
|
|
7,600
|
|
|
7,238
|
|
|
7,334
|
|
|
Income before income taxes
|
1,687
|
|
|
3,452
|
|
|
3,671
|
|
|
4,445
|
|
|
Provision for income taxes
|
364
|
|
|
841
|
|
|
953
|
|
|
1,228
|
|
|
Net income
|
$
|
1,323
|
|
|
2,611
|
|
|
2,718
|
|
|
3,217
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
0.28
|
|
|
0.30
|
|
|
0.34
|
|
Diluted
|
0.14
|
|
|
0.28
|
|
|
0.29
|
|
|
0.34
|
|
Condensed Balance Sheets:
|
|
|
|
|||
December 31,
|
2015
|
|
2014
|
|||
Assets:
|
|
|
|
|||
Cash on deposit with subsidiary
|
$
|
534
|
|
|
3,985
|
|
Investment securities available-for-sale, at fair value
|
888
|
|
|
1,970
|
|
|
Investment in subsidiary
|
138,396
|
|
|
119,350
|
|
|
Other assets
|
290
|
|
|
419
|
|
|
Total assets
|
$
|
140,108
|
|
|
125,724
|
|
|
|
|
|
|||
Liabilities
|
$
|
—
|
|
|
29
|
|
|
|
|
|
|||
Shareholders' equity
|
140,108
|
|
|
125,695
|
|
|
Total liabilities and shareholders' equity
|
$
|
140,108
|
|
|
125,724
|
|
Condensed Statements of Income
|
|
|
|
|
|
||||
Year ended December 31,
|
2015
|
|
2014
|
|
2013
|
||||
Income:
|
|
|
|
|
|
||||
Dividends from subsidiaries
|
$
|
5,400
|
|
|
8,800
|
|
|
10,525
|
|
Interest and dividends
|
58
|
|
|
91
|
|
|
89
|
|
|
Net gain on sales of securities
|
254
|
|
|
10
|
|
|
124
|
|
|
Total income
|
5,712
|
|
|
8,901
|
|
|
10,738
|
|
|
|
|
|
|
|
|
||||
Total expenses
|
1,016
|
|
|
1,077
|
|
|
127
|
|
|
|
|
|
|
|
|
||||
Income before income tax expense/benefit and equity in undistributed income of subsidiaries
|
4,696
|
|
|
7,824
|
|
|
10,611
|
|
|
Income tax (expense) benefit
|
250
|
|
|
350
|
|
|
(12
|
)
|
|
Equity in undistributed income (loss) of subsidiaries
|
6,528
|
|
|
1,695
|
|
|
(1,819
|
)
|
|
Net income
|
$
|
11,474
|
|
|
9,869
|
|
|
8,780
|
|
Condensed Statements of Cash Flows
|
|
|
|
|
|
||||
Year ended December 31,
|
2015
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||||
Net income
|
$
|
11,474
|
|
|
9,869
|
|
|
8,780
|
|
Adjustments for non-cash items -
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in undistributed income of subsidiaries
|
(6,528
|
)
|
|
(1,695
|
)
|
|
1,819
|
|
|
Other, net
|
42
|
|
|
(474
|
)
|
|
7
|
|
|
Net cash flows from operating activities
|
4,988
|
|
|
7,700
|
|
|
10,606
|
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of securities available-for-sale
|
(215
|
)
|
|
(107
|
)
|
|
(563
|
)
|
|
Proceeds from sales of available-for-sale securities
|
1,217
|
|
|
227
|
|
|
569
|
|
|
Cash paid for business acquisition
|
(3,757
|
)
|
|
(24,750
|
)
|
|
(7,815
|
)
|
|
Net cash flows from (used in) investing activities
|
(2,755
|
)
|
|
(24,630
|
)
|
|
(7,809
|
)
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Principal payments on long-term debt
|
—
|
|
|
—
|
|
|
(1,792
|
)
|
|
Proceeds from issuance of common stock
|
390
|
|
|
372
|
|
|
27,238
|
|
|
Cash dividends paid on common stock
|
(6,239
|
)
|
|
(5,950
|
)
|
|
(5,148
|
)
|
|
Other
|
165
|
|
|
—
|
|
|
70
|
|
|
Net cash flows from (used in) financing activities
|
(5,684
|
)
|
|
(5,578
|
)
|
|
20,368
|
|
|
Net change in cash
|
(3,451
|
)
|
|
(22,508
|
)
|
|
23,165
|
|
|
Cash at beginning of year
|
3,985
|
|
|
26,493
|
|
|
3,328
|
|
|
Cash at end of year
|
$
|
534
|
|
|
3,985
|
|
|
26,493
|
|
(a)
Exhibit No
.
|
|
|
Exhibit Description
|
|
2.1
|
|
Agreement and Plan of Merger dated as of October 9, 2012 by and between LCNB Corp. and First Capital Bancshares, Inc. – incorporated by reference to the Registrant's Form S-4 filed on October 29, 2012, Part I, Annex A.
|
|
2.2
|
|
Stock Purchase Agreement between LCNB Corp. and Colonial Banc Corp. dated as of October 28, 2013 - incorporated by reference to the Registrant's Current Report on Form 8-K filed on October 28, 2013, Exhibit 2.1.
|
|
2.3
|
|
Agreement and Plan of Merger dated as of December 29, 2014 by and between LCNB Corp. and BNB Bancorp, Inc., - incorporated by reference to the Registrant's Current Report on Form 8-K filed on January 2, 2015, Exhibit 2.1.
|
|
3.1
|
|
Amended and Restated Articles of Incorporation of LCNB Corp., as amended – incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010, Exhibit 3.1.
|
|
3.2
|
|
Code of Regulations of LCNB Corp. - Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005, Exhibit 3(ii).
|
|
4.1
|
|
Warrant to Purchase Shares of Common Stock of the Registrant, dated January 9, 2009 - incorporated by reference to the Registrant's Current Report on Form 8-K filed on January 9, 2009, Exhibit 4.1.
|
|
4.2
|
|
Letter Agreement, dated as of January 9, 2009 between the Registrant and the U.S. Department of the Treasury, which includes the Securities Purchase Agreement – Standard Terms – incorporated by reference to the Registrant's Current Report on Form 8-K filed on January 9, 2009, Exhibit 10.1.
|
|
4.3
|
|
Substitute Warrant to Purchase Shares of Common Stock of the Registrant, dated January 9, 2009 – incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, Exhibit 4.3.
|
|
4.4
|
|
Repurchase Letter Agreement, dated as of October 21, 2009 between the Registrant and the U.S. Department of the Treasury – incorporated by reference to the Registrant's Current Report on Form 8-K filed on October 21, 2009, Exhibit 10.1.
|
|
10.1
|
|
LCNB Corp. Ownership Incentive Plan - incorporated by reference to Registrant's Form DEF 14A Proxy Statement pursuant to Section 14(a), dated March 15, 2002, Exhibit A (000-26121).
|
(a)
Exhibit No
.
|
|
|
Exhibit Description
|
|
10.2
|
|
LCNB Corp. 2015 Ownership Incentive Plan - incorporated by reference to Registrant's Form DEF 14A Proxy Statement pursuant to Section 14(a), dated March 13, 2015, Exhibit A (001-35292)
|
|
10.3
|
|
Form of Option Grant Agreement under the LCNB Corp. Ownership Incentive Plan - incorporated by reference to the Registrant's Form 10-K for the fiscal year ended December 31, 2005, Exhibit 10.2.
|
|
10.4
|
|
Letter Agreement, dated as of January 9, 2009 between the Registrant and the U.S. Department of the Treasury, which includes the Securities Purchase Agreement – Standard Terms - incorporated by reference to the Registrant's Current Report on Form 8-K filed on January 9, 2009, Exhibit 10.1.
|
|
10.5
|
|
Nonqualified Executive Retirement Plan – incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2009, Exhibit 10.4.
|
|
10.6
|
|
Repurchase Letter Agreement, dated as of October 21, 2009 between the Registrant and the U.S. Department of the Treasury – incorporated by reference to the Registrant's Current Report on Form 8-K filed on October 21, 2009, Exhibit 10.1.
|
|
10.7
|
|
Form of Restricted Share Grant Agreement under the LCNB Corp. 2015 Ownership Incentive Plan.
|
|
14.1
|
|
LCNB Corp. Code of Business Conduct and Ethics - incorporated by reference to Registrant's 2003 Form 10-K, Exhibit 14.1.
|
|
14.2
|
|
LCNB Corp. Code of Ethics for Senior Financial Officers - Incorporated by reference to Registrant's 2003 Form 10-K, Exhibit 14.2.
|
|
21
|
|
LCNB Corp. Subsidiaries.
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
23.2
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
31.1
|
|
Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
|
Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
99.1
|
|
Certification of Chief Executive Officer Pursuant to Section 111(b)(4) of the Emergency Stabilization Act of 2008 - incorporated by reference to Registrant's 2009 Form 10-K, Exhibit 99.1.
|
|
99.2
|
|
Certification of Chief Financial Officer Pursuant to Section 111(b)(4) of the Emergency Stabilization Act of 2008 - incorporated by reference to Registrant's 2009 Form 10-K, Exhibit 99.2.
|
|
101
|
|
The following financial information from LCNB Corp.’s Annual Report on Form 10-K for the year ended December 31, 2015 is formatted in Extensible Business Reporting Language: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text.
|
|
LCNB Corp.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
/s/ Steve P. Foster
|
|
|
Steve P. Foster
|
|
|
Chief Executive Officer & President
|
|
|
March 9, 2016
|
|
|
|
|
/s/ Steve P. Foster
|
|
/s/ William H. Kaufman
|
|
Steve P. Foster
|
|
William H. Kaufman
|
|
Chief Executive Officer, President, & Director
|
|
Director
|
|
(Principal Executive Officer)
|
|
March 9, 2016
|
|
March 9, 2016
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert C. Haines II
|
|
/s/ Anne E. Krehbiel
|
|
Robert C. Haines II
|
|
Anne E. Krehbiel
|
|
Executive Vice President & Chief Financial
|
|
Director
|
|
Officer (Principal Financial and Accounting
|
|
March 9, 2016
|
|
Officer)
|
|
|
|
March 9, 2016
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Stephen P. Wilson
|
|
|
|
Stephen P. Wilson
|
|
John H. Kochensparger III
|
|
Chairman of the Board of Directors
|
|
Director
|
|
March 9, 2016
|
|
March 9, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Spencer S. Cropper
|
|
/s/ George L. Leasure
|
|
Spencer S. Cropper
|
|
George L. Leasure
|
|
Director
|
|
Director
|
|
March 9, 2016
|
|
March 9, 2016
|
|
|
|
|
|
|
|
|
|
1.
|
Grant of Restricted Share
. Pursuant to Section 7 of the 2015 LCNB Corp. Ownership Incentive Plan (the “Plan”), the Company hereby issues to the Grantee on the Grant Date a Restricted Share Award consisting of, in the aggregate, ________ Shares of the Company (the “Restricted Share”), on the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.
|
2.
|
Consideration
. The grant of the Restricted Share is made in consideration of the services to be rendered by the Grantee to the Company.
|
3.
|
Restricted Period; Vesting
.
|
a.
|
Vesting
. Except as otherwise provided herein, provided that the Grantee does not Terminate Employment before the applicable vesting date, the Restricted Share will vest each anniversary of the Grant Date, as follows:
|
b.
|
Change of Control
.
Notwithstanding the provisions of subparagraph a, three months prior to the effective date of any Change of Control of the Company and ending on the first anniversary of such a Change of Control, one hundred percent (100%) of the Restricted Shares granted herein which are then outstanding hereunder for at least six months shall vest in the event that (i) the Company Terminates Employment of the Eligible Person involuntarily for any reason other than Cause, or (ii) the Eligible Person Terminates Employment voluntarily for Good Reason.
|
c.
|
Death, Incapacity and Retirement
. Notwithstanding the provisions of subparagraph a, one hundred percent (100%) of the Restricted Shares granted herein shall vest in the event that the Grantee’s Termination of Employment occurs as a result of, or following, Grantee’s (i) death, (ii) incapacity, or (iii) retirement after attaining age 65.
|
d.
|
Employment Status
. The Grantee is an employee of the Company as of the date of this Agreement.
|
4.
|
Restrictions
. Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, the Restricted Share or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Share or the rights relating thereto during the Restricted Period shall be wholly ineffective and, if any such attempt is made, the Restricted Share will be forfeited by the Grantee and all of the Grantee's rights to such shares shall immediately terminate without any payment or consideration by the Company.
|
5.
|
Rights as Shareholder; Dividends
.
|
a.
|
The Grantee shall be the record owner of the Restricted Share until the Shares are sold or otherwise disposed of, and shall be entitled to all of the rights of a shareholder of the Company including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares. Notwithstanding the foregoing, any dividends or other distributions shall be subject to the same transferability and vesting restrictions as the shares of Restricted Share with respect to which they were paid.
|
b.
|
The Company may issue share certificates or evidence the Grantee's interest by using a restricted book entry account with the Company's transfer agent. Physical possession or custody of any share certificates that are issued shall be retained by the Company until such time as the Restricted Share vests.
|
c.
|
If the Grantee forfeits any rights he has under this Agreement in accordance with Section 3, the Grantee shall, on the date of such forfeiture, no longer have any rights as a shareholder with respect to the Restricted Share and shall no longer be entitled to vote or receive dividends on such shares.
|
6.
|
No Right to Continued Employment
. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as an employee, consultant or director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to Terminate Employment of the Grantee at any time, with or without Cause.
|
7.
|
Adjustments
. If any change is made to the outstanding Shares or the capital structure of the Company, if required, the Shares shall be adjusted or terminated in any manner as contemplated by Section 9 of the Plan.
|
8.
|
Tax Liability and Withholding
.
|
a.
|
The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Share and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means:
|
(i)
|
tendering a cash payment.
|
(ii)
|
authorizing the Company to withhold shares of Common Share from the shares of Common Share otherwise issuable or deliverable to the Grantee as a result of the vesting of the Restricted Share;
provided, however
, that no Shares shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.
|
(iii)
|
delivering to the Company previously owned and unencumbered Shares.
|
b.
|
Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding for a local, state or federal taxing authority ("Tax-Related Items"), the ultimate liability for all Tax-Related Items is and remains the Grantee's responsibility and the Company (i) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Share or the subsequent sale of any shares; and (ii) does not commit to structure the Restricted Share to reduce or eliminate the Grantee's liability for Tax-Related Items.
|
9.
|
Section 83(b) Election
. The Grantee may make an election under Code Section 83(b) (a "Section 83(b) Election") with respect to the Restricted Share. Any such election must be made within thirty (30) days after the Grant Date. If the Grantee elects to make a Section 83(b) Election, the Grantee shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the US Internal Revenue Service. The Grantee agrees to assume full responsibility for ensuring that the Section 83(b) Election is
|
10.
|
Clawback Policy
. The Grantee acknowledges receipt of the Company’s Clawback Policy. The Grantee understands and agrees to be subject to the terms and provisions of the Company’s Clawback Policy as it may be amended from time to time, and which terms and provisions are incorporated herein by reference.
|
11.
|
Share Ownership and Retention Policy
. The Grantee acknowledges receipt of the Company’s Share Ownership and Retention Policy. The Grantee understands and agrees to be subject to the terms and provisions of the Company’s Share Ownership and Retention Policy as it may be amended from time to time, and which terms and provisions are incorporated herein by reference.
|
12.
|
Compliance with Law
. The issuance and transfer of Shares shall be subject to compliance by the Company and the Grantee with all applicable requirements of federal and state securities laws and with all applicable requirements of any share exchange on which the Shares may be listed. No Shares shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the Shares with the Securities and Exchange Commission, any state securities commission or any share exchange to effect such compliance.
|
13.
|
Legends
. A legend may be placed on any certificate(s) or other document(s) delivered to the Grantee indicating restrictions on transferability of the Shares underlying the Restricted Share pursuant to this Agreement or any other restrictions that the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any applicable federal or state securities laws or any share exchange on which the Shares are then listed or quoted.
|
14.
|
Notices
. All notices required under the Plan or this Agreement shall be in writing. Any notice to the Company shall be addressed to it at its office at: 2 North Broadway, Lebanon, Ohio, 45036. Any notice to the Grantee shall be addressed to the Grantee at the Grantee's address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
|
15.
|
Governing Law
. This Agreement will be construed and interpreted in accordance with the laws of the State of Ohio without regard to conflict of law principles.
|
16.
|
Interpretation
. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.
|
17.
|
Restricted Share Subject to Plan
. This Agreement is subject to the Plan as approved by the Company's shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term
|
18.
|
Successors and Assigns
. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee's beneficiaries, executors, administrators and the person(s) to whom the Restricted Share may be transferred by will or the laws of descent or distribution.
|
19.
|
Severability
. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
|
20.
|
Discretionary Nature of Plan
. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Share in this Agreement does not create any contractual right or other right to receive any Restricted Share or other Ownership Incentives in the future. Future awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee's employment with the Company.
|
21.
|
Amendment
. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Share, prospectively or retroactively;
provided, that
, no such amendment shall adversely affect the Grantee's material rights under this Agreement without the Grantee's consent.
|
22.
|
No Impact on Other Benefits
. The value of the Grantee's Restricted Share is not part of his normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
|
23.
|
Counterparts
. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
|
24.
|
Acceptance
. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Share subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the grant or vesting of the Restricted Share or disposition of the underlying shares and that the Grantee has been advised to consult a tax advisor prior to such grant, vesting or disposition.
|
|
LCNB Corp.
|
|
By: _____________________
Name:
Title:
|
|
[GRANTEE NAME]
|
|
By: _____________________
Name:
|
|
/s/ Clark, Schaefer, Hackett & Co. (successor of J. D. Cloud & Co. L.L.P., through merger)
|
|
Clark, Schaefer, Hackett & Co. (successor of J. D. Cloud & Co. L.L.P., through merger)
|
|
/s/ BKD, LLP
|
|
BKD, LLP
|
1)
|
I have reviewed this annual report on Form 10-K of LCNB Corp.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
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b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Steve P. Foster
|
|
Steve P. Foster
|
|
Chief Executive Officer & President
|
|
March 9, 2016
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1)
|
I have reviewed this annual report on Form 10-K of LCNB Corp.;
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2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Robert C. Haines II
|
|
Robert C. Haines II
|
|
Executive Vice President &
|
|
Chief Financial Officer
|
|
March 9, 2016
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Steve P. Foster
|
|
/s/ Robert C. Haines II
|
|
|
Steve P. Foster
|
|
Robert C. Haines II
|
|
|
Chief Executive Officer and President
|
|
Executive Vice President and
|
|
|
|
|
Chief Financial Officer
|
|