|
|
|
|
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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
|
☐
Large accelerated filer
|
☒
Accelerated filer
|
☐
Non-accelerated filer
|
☐
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;
|
2.
|
LCNB’s ability to integrate recent and future acquisitions, including the recent merger with Columbus First Bancorp, Inc., may be unsuccessful, or may be more difficult, time-consuming or costly than expected;
|
3.
|
LCNB may incur increased loan charge-offs in the future;
|
4.
|
LCNB may face competitive loss of customers;
|
5.
|
changes in the interest rate environment may have results on LCNB’s operations materially different from those anticipated by LCNB’s market risk management functions;
|
6.
|
changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
|
7.
|
changes in regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact LCNB’s operating results;
|
8.
|
LCNB may experience difficulties growing loan and deposit balances;
|
9.
|
the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations;
|
10.
|
deterioration in the financial condition of the U.S. banking system may impact the valuations of investments LCNB has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments;
|
11.
|
difficulties with technology or data security breaches, including cyberattacks, that could negatively affect LCNB's ability to conduct business and its relationships with customers, vendors, and others; and
|
12.
|
government intervention in the U.S. financial system, including the effects of recent legislative, tax, accounting and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Jumpstart Our Business Startups Act, the Consumer Financial Protection Bureau, the capital ratios of Basel III as adopted by the federal banking authorities, and the Tax Cuts and Jobs Act.
|
•
|
35
offices, including a main office in Warren County, Ohio and branch offices in Warren, Butler, Clinton, Clermont, Fayette, Franklin, Hamilton, Montgomery, Preble, and Ross Counties, Ohio,
|
•
|
a loan production office in Franklin County, Ohio,
|
•
|
an Operations Center in Warren County, Ohio,
|
•
|
and
38
ATMs.
|
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 $500 million 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.
|
1.
|
Reduced reporting requirements on call reports for the first and third quarters of a reporting year for banks with less than $5 billion in total consolidated assets;
|
2.
|
Extended regulatory examination cycles from twelve to eighteen months for banks with less than $3 billion in total consolidated assets;
|
3.
|
Requiring federal financial institution regulators to classify all qualifying investment-grade, liquid and readily-marketable municipal securities as level 2B liquid assets under the liquidity coverage ratio rule;
|
4.
|
Exempting reciprocal deposits from treatment as brokered deposits under the FDIC's brokered deposits rule, up to the lesser of $5 billion or 20% of bank liabilities; and
|
5.
|
Simplifying regulatory capital requirements by providing that banks with less than $10 billion in total consolidated assets that meet a to-be-developed community bank leverage ratio of tangible equity to average assets will be deemed to be in compliance with capital and leverage requirements.
|
|
At December 31,
|
||||||||
|
2018
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
||||
U.S. Treasury notes
|
$
|
2,235
|
|
|
2,259
|
|
|
28,145
|
|
U.S. Agency notes
|
78,340
|
|
|
83,261
|
|
|
85,400
|
|
|
U.S. Agency mortgage-backed securities
|
55,610
|
|
|
67,153
|
|
|
71,047
|
|
|
Municipal securities
|
102,236
|
|
|
122,540
|
|
|
132,860
|
|
|
Total securities available-for-sale
|
238,421
|
|
|
275,213
|
|
|
317,452
|
|
|
|
|
|
|
|
|
||||
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
Municipal securities
|
29,721
|
|
|
32,571
|
|
|
41,003
|
|
|
|
|
|
|
|
|
||||
Equity securities with a readily determinable fair value:
|
|
|
|
|
|
||||
Mutual funds
|
1,559
|
|
|
1,542
|
|
|
1,482
|
|
|
Trust preferred securities
|
—
|
|
|
50
|
|
|
48
|
|
|
Equity securities
|
519
|
|
|
568
|
|
|
568
|
|
|
Equity securities without a readily determinable fair value:
|
|
|
|
|
|
||||
Mutual funds
|
2,000
|
|
|
1,000
|
|
|
1,000
|
|
|
Equity securities
|
99
|
|
|
99
|
|
|
99
|
|
|
Federal Reserve Bank stock
|
4,653
|
|
|
2,732
|
|
|
2,732
|
|
|
Federal Home Loan Bank stock
|
4,845
|
|
|
3,638
|
|
|
3,638
|
|
|
Total securities
|
$
|
281,817
|
|
|
317,413
|
|
|
368,022
|
|
|
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
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
One to five years
|
986
|
|
|
970
|
|
|
2.08
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Five to ten years
|
1,292
|
|
|
1,265
|
|
|
2.06
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total U.S. Treasury notes
|
2,278
|
|
|
2,235
|
|
|
2.07
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Agency notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Within one year
|
5,000
|
|
|
4,965
|
|
|
1.41
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
One to five years
|
62,000
|
|
|
60,385
|
|
|
1.96
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Five to ten years
|
13,708
|
|
|
12,990
|
|
|
1.96
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total U.S. Agency notes
|
80,708
|
|
|
78,340
|
|
|
1.93
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal securities (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Within one year
|
9,768
|
|
|
9,734
|
|
|
2.26
|
%
|
|
3,200
|
|
|
3,195
|
|
|
3.15
|
%
|
||
One to five years
|
49,885
|
|
|
49,474
|
|
|
2.82
|
%
|
|
3,143
|
|
|
3,069
|
|
|
2.89
|
%
|
||
Five to ten years
|
42,336
|
|
|
41,378
|
|
|
2.91
|
%
|
|
7,982
|
|
|
7,787
|
|
|
3.39
|
%
|
||
After ten years
|
1,724
|
|
|
1,650
|
|
|
2.89
|
%
|
|
15,396
|
|
|
14,973
|
|
|
5.80
|
%
|
||
Total Municipal securities
|
103,713
|
|
|
102,236
|
|
|
2.81
|
%
|
|
29,721
|
|
|
29,024
|
|
|
4.56
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Agency mortgage-backed securities
|
57,584
|
|
|
55,610
|
|
|
2.46
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Totals
|
$
|
244,283
|
|
|
238,421
|
|
|
2.43
|
%
|
|
29,721
|
|
|
29,024
|
|
|
4.56
|
%
|
(1)
|
Yields on tax-exempt obligations are computed on a taxable-equivalent basis based upon a 21.0% statutory Federal income tax rate.
|
|
At December 31,
|
|||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Commercial and industrial
|
$
|
77,740
|
|
|
6.5
|
%
|
|
$
|
36,057
|
|
|
4.2
|
%
|
|
$
|
41,878
|
|
|
5.1
|
%
|
|
$
|
45,275
|
|
|
5.9
|
%
|
|
$
|
35,424
|
|
|
5.1
|
%
|
Commercial, secured by real estate
|
740,647
|
|
|
61.8
|
%
|
|
527,947
|
|
|
62.2
|
%
|
|
477,275
|
|
|
58.2
|
%
|
|
419,633
|
|
|
54.5
|
%
|
|
379,141
|
|
|
54.3
|
%
|
|||||
Residential real estate
|
349,127
|
|
|
29.1
|
%
|
|
251,582
|
|
|
29.6
|
%
|
|
265,788
|
|
|
32.5
|
%
|
|
273,139
|
|
|
35.4
|
%
|
|
254,087
|
|
|
36.4
|
%
|
|||||
Consumer
|
17,283
|
|
|
1.5
|
%
|
|
17,450
|
|
|
2.1
|
%
|
|
19,173
|
|
|
2.3
|
%
|
|
18,510
|
|
|
2.4
|
%
|
|
18,006
|
|
|
2.5
|
%
|
|||||
Agricultural
|
13,297
|
|
|
1.1
|
%
|
|
15,194
|
|
|
1.8
|
%
|
|
14,802
|
|
|
1.8
|
%
|
|
13,479
|
|
|
1.7
|
%
|
|
11,472
|
|
|
1.6
|
%
|
|||||
Other loans, including deposit overdrafts
|
450
|
|
|
—
|
%
|
|
539
|
|
|
0.1
|
%
|
|
633
|
|
|
0.1
|
%
|
|
665
|
|
|
0.1
|
%
|
|
680
|
|
|
0.1
|
%
|
|||||
|
1,198,544
|
|
|
100.0
|
%
|
|
848,769
|
|
|
100.0
|
%
|
|
819,549
|
|
|
100.0
|
%
|
|
770,701
|
|
|
100.0
|
%
|
|
698,810
|
|
|
100.0
|
%
|
|||||
Deferred origination costs (fees), net
|
79
|
|
|
|
|
|
291
|
|
|
|
|
|
254
|
|
|
|
|
|
237
|
|
|
|
|
|
146
|
|
|
|
|
|||||
Total loans
|
1,198,623
|
|
|
|
|
|
849,060
|
|
|
|
|
|
819,803
|
|
|
|
|
|
770,938
|
|
|
|
|
|
698,956
|
|
|
|
|
|||||
Less allowance for loan losses
|
4,046
|
|
|
|
|
|
3,403
|
|
|
|
|
|
3,575
|
|
|
|
|
|
3,129
|
|
|
|
|
|
3,121
|
|
|
|
|
|||||
Loans, net
|
$
|
1,194,577
|
|
|
|
|
|
$
|
845,657
|
|
|
|
|
|
$
|
816,228
|
|
|
|
|
|
$
|
767,809
|
|
|
|
|
|
$
|
695,835
|
|
|
|
|
|
(In thousands)
|
||
Maturing in one year or less
|
$
|
49,309
|
|
Maturing after one year, but within five years
|
104,701
|
|
|
Maturing beyond five years
|
677,674
|
|
|
Total commercial and agricultural loans
|
$
|
831,684
|
|
|
|
|
|
Loans maturing beyond one year:
|
|
|
|
Fixed rate
|
$
|
290,995
|
|
Variable rate
|
491,380
|
|
|
Total
|
$
|
782,375
|
|
|
At December 31,
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Dollars in thousands)
|
||||||||||||||
Non-accrual loans
|
$
|
2,951
|
|
|
2,965
|
|
|
5,725
|
|
|
1,723
|
|
|
5,599
|
|
Past-due 90 days or more and still accruing
|
149
|
|
|
—
|
|
|
23
|
|
|
559
|
|
|
203
|
|
|
Accruing restructured loans
|
10,516
|
|
|
10,469
|
|
|
11,731
|
|
|
13,723
|
|
|
14,269
|
|
|
Total
|
$
|
13,616
|
|
|
13,434
|
|
|
17,479
|
|
|
16,005
|
|
|
20,071
|
|
Percent to total loans
|
1.14
|
%
|
|
1.58
|
%
|
|
2.13
|
%
|
|
2.08
|
%
|
|
2.87
|
%
|
|
At December 31,
|
|||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||
|
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
|
$
|
400
|
|
|
6.5
|
%
|
|
$
|
378
|
|
|
4.2
|
%
|
|
$
|
350
|
|
|
5.1
|
%
|
|
$
|
244
|
|
|
5.9
|
%
|
|
$
|
129
|
|
|
5.1
|
%
|
Commercial, secured by real estate
|
2,745
|
|
|
61.8
|
%
|
|
2,178
|
|
|
62.2
|
%
|
|
2,179
|
|
|
58.2
|
%
|
|
1,908
|
|
|
54.5
|
%
|
|
1,990
|
|
|
54.3
|
%
|
|||||
Residential real estate
|
767
|
|
|
29.1
|
%
|
|
717
|
|
|
29.6
|
%
|
|
885
|
|
|
32.5
|
%
|
|
854
|
|
|
35.4
|
%
|
|
926
|
|
|
36.4
|
%
|
|||||
Consumer
|
87
|
|
|
1.5
|
%
|
|
76
|
|
|
2.1
|
%
|
|
96
|
|
|
2.3
|
%
|
|
54
|
|
|
2.4
|
%
|
|
63
|
|
|
2.5
|
%
|
|||||
Agricultural
|
46
|
|
|
1.1
|
%
|
|
53
|
|
|
1.8
|
%
|
|
60
|
|
|
1.8
|
%
|
|
66
|
|
|
1.7
|
%
|
|
11
|
|
|
1.6
|
%
|
|||||
Other loans, including deposit overdrafts
|
1
|
|
|
—
|
%
|
|
1
|
|
|
0.1
|
%
|
|
5
|
|
|
0.1
|
%
|
|
3
|
|
|
0.1
|
%
|
|
2
|
|
|
0.1
|
%
|
|||||
Total
|
$
|
4,046
|
|
|
100.0
|
%
|
|
$
|
3,403
|
|
|
100.0
|
%
|
|
$
|
3,575
|
|
|
100.0
|
%
|
|
$
|
3,129
|
|
|
100.0
|
%
|
|
$
|
3,121
|
|
|
100.0
|
%
|
|
(In thousands)
|
||
Maturity within 3 months
|
$
|
11,564
|
|
After 3 but within 6 months
|
22,534
|
|
|
After 6 but within 12 months
|
34,534
|
|
|
After 12 months
|
66,637
|
|
|
|
$
|
135,269
|
|
|
|
Name of Office
|
|
Address
|
|
County
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
Main Office
|
|
2 North Broadway
Lebanon, Ohio 45036
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
2.
|
|
Auto Bank
|
|
Silver and Mechanic Streets
Lebanon, Ohio 45036
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
3.
|
|
Barron Street Office
|
|
1697 North Barron Street
Eaton, Ohio 45320
|
|
Preble
|
|
Leased
|
|
|
|
|
|
|
|
|
|
4.
|
|
Bridge Street Office
|
|
1240 North Bridge Street
Chillicothe, Ohio 45601
|
|
Ross
|
|
Owned
|
|
|
|
|
|
|
|
|
|
5.
|
|
Brookville Office
|
|
225 West Upper Lewisburg Salem Road Brookville, Ohio 45309
|
|
Montgomery
|
|
Owned
|
|
|
|
|
|
|
|
|
|
6.
|
|
Centerville Office
|
|
9605 Dayton-Lebanon Pike
Centerville, Ohio 45458
|
|
Montgomery
|
|
Owned
|
|
|
|
|
|
|
|
|
|
7.
|
|
Chillicothe Office
|
|
33 West Main Street
Chillicothe, Ohio 45601
|
|
Ross
|
|
Leased
|
|
|
|
|
|
|
|
|
|
8.
|
|
Colerain Township Office
|
|
3209 West Galbraith Road
Cincinnati, Ohio 45239
|
|
Hamilton
|
|
Owned
|
|
|
|
|
|
|
|
|
|
9.
|
|
Columbus Avenue Office
|
|
730 Columbus Avenue
Lebanon, Ohio 45036
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
10.
|
|
Eaton Office
|
|
110 West Main Street
Eaton, Ohio 45320
|
|
Preble
|
|
Owned
|
|
|
|
|
|
|
|
|
|
11.
|
|
Fairfield Office
|
|
765 Nilles Road
Fairfield, Ohio 45014
|
|
Butler
|
|
Leased
|
|
|
|
|
|
|
|
|
|
12.
|
|
Frankfort Office
|
|
Springfield and Main Streets
Frankfort, Ohio 45628
|
|
Ross
|
|
Owned
|
|
|
|
|
|
|
|
|
|
13.
|
|
Goshen Office
|
|
6726 Dick Flynn Blvd.
Goshen, Ohio 45122
|
|
Clermont
|
|
Owned
|
|
|
|
|
|
|
|
|
|
14.
|
|
Hamilton Office
|
|
794 NW Washington Blvd.
Hamilton, Ohio 45013
|
|
Butler
|
|
Owned
|
|
|
|
|
|
|
|
|
|
15.
|
|
Hunter Office
|
|
3878 State Route 122
Franklin, Ohio 45005
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
16.
|
|
Lewisburg Office
|
|
522 South Commerce Street
Lewisburg, Ohio 45338
|
|
Preble
|
|
Owned
|
|
|
|
|
|
|
|
|
|
17.
|
|
Loveland Office
|
|
500 Loveland-Madeira Road Loveland, Ohio 45140
|
|
Hamilton
|
|
Owned
|
|
|
|
|
|
|
|
|
|
|
|
Name of Office
|
|
Address
|
|
County
|
|
|
|
|
|
|
|
|
|
|
|
18.
|
|
Maineville Office
|
|
7795 South State Route 48 Maineville, Ohio 45039
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
19.
|
|
Mason/West Chester Office
|
|
1050 Reading Road
Mason, Ohio 45040
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
20.
|
|
Middletown Office
|
|
4441 Marie Drive
Middletown, Ohio 45044
|
|
Butler
|
|
Owned
|
|
|
|
|
|
|
|
|
|
21.
|
|
Monroe Office
|
|
101 Clarence F. Warner Drive
Monroe, Ohio 45050
|
|
Butler
|
|
Owned
|
|
|
|
|
|
|
|
|
|
22.
|
|
New Paris Office
|
|
201 South Washington Street
New Paris, Ohio 45347
|
|
Preble
|
|
Owned
|
|
|
|
|
|
|
|
|
|
23.
|
|
Oakwood Office
|
|
2705 Far Hills Avenue
Oakwood, Ohio 45419
|
|
Montgomery
|
|
(2)
|
|
|
|
|
|
|
|
|
|
24.
|
|
Otterbein Office
|
|
Otterbein Retirement Community
State Route 741
Lebanon, Ohio 45036
|
|
Warren
|
|
Leased
|
|
|
|
|
|
|
|
|
|
25.
|
|
Oxford Office (1)
|
|
30 West Park Place
Oxford, Ohio 45056
|
|
Butler
|
|
(2)
|
|
|
|
|
|
|
|
|
|
26.
|
|
Rochester/Morrow Office
|
|
Route 22-3 at 123
Morrow, Ohio 45152
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
27.
|
|
South Lebanon Office
|
|
603 Corwin Nixon Blvd.
South Lebanon, Ohio 45065
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
28.
|
|
Springboro/Franklin Office
|
|
525 West Central Avenue
Springboro, Ohio 45066
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
29.
|
|
Warrior Office
|
|
Lebanon High School
1916 Drake Road
Lebanon, Ohio 45036
|
|
Warren
|
|
Leased
|
|
|
|
|
|
|
|
|
|
30.
|
|
Washington Court House Office
|
|
100 Crossings Drive
Washington Court House, Ohio 43160
|
|
Fayette
|
|
Owned
|
|
|
|
|
|
|
|
|
|
31.
|
|
Waynesville Office
|
|
9 North Main Street
Waynesville, Ohio 45068
|
|
Warren
|
|
Owned
|
|
|
|
|
|
|
|
|
|
32.
|
|
West Alexandria Office
|
|
55 East Dayton Street
West Alexandria, Ohio 45381
|
|
Preble
|
|
Owned
|
|
|
|
|
|
|
|
|
|
33.
|
|
Western Avenue Office
|
|
1006 Western Avenue
Chillicothe, Ohio 45601
|
|
Ross
|
|
Owned
|
|
|
|
|
|
|
|
|
|
34.
|
|
Wilmington Office
|
|
1243 Rombach Avenue
Wilmington, Ohio 45177
|
|
Clinton
|
|
Owned
|
|
|
|
|
|
|
|
|
|
35.
|
|
Worthington Office
|
|
6877 North High Street
Worthington, Ohio 43085 |
|
Franklin
|
|
Leased
|
|
|
|
|
|
|
|
|
|
|
|
Name of Office
|
|
Address
|
|
County
|
|
|
|
|
|
|
|
|
|
|
|
36.
|
|
Loan Production Office
|
|
1500 West Third Ave., Suite 205 & 209 Grandview Heights, Ohio 43212
|
|
Franklin
|
|
Leased
|
|
|
|
|
|
|
|
|
|
37.
|
|
Operations Center
|
|
105 North Broadway
Lebanon, Ohio 45036 |
|
Warren
|
|
(3)
|
(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.
|
(3)
|
The Bank leases the Operations Center from the Warren County Port Authority. Upon expiration of the lease in 2027, the Bank has the option to purchase the property for $1.00.
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||
October 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
Not applicable
|
November 2018
|
21,400
|
|
|
16.2766
|
|
|
21,400
|
|
|
Not applicable
|
December 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
Not applicable
|
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:
|
|
|
|
|
|
||||
2002 Plan
|
13,278
|
|
|
$
|
11.98
|
|
|
—
|
|
2015 Plan
|
—
|
|
|
—
|
|
|
419,301
|
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
13,278
|
|
|
$
|
11.98
|
|
|
419,301
|
|
|
For the Years Ended December 31,
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Dollars in thousands, except per share data)
|
||||||||||||||
Income Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
|
54,594
|
|
|
44,463
|
|
|
43,750
|
|
|
42,659
|
|
|
39,477
|
|
Interest expense
|
6,425
|
|
|
3,599
|
|
|
3,504
|
|
|
3,328
|
|
|
3,590
|
|
|
Net interest income
|
48,169
|
|
|
40,864
|
|
|
40,246
|
|
|
39,331
|
|
|
35,887
|
|
|
Provision for loan losses
|
923
|
|
|
215
|
|
|
913
|
|
|
1,366
|
|
|
930
|
|
|
Net interest income after provision for loan losses
|
47,246
|
|
|
40,649
|
|
|
39,333
|
|
|
37,965
|
|
|
34,957
|
|
|
Non-interest income
|
11,050
|
|
|
10,458
|
|
|
10,853
|
|
|
10,123
|
|
|
9,142
|
|
|
Non-interest expenses
|
40,502
|
|
|
33,863
|
|
|
33,261
|
|
|
32,392
|
|
|
30,844
|
|
|
Income before income taxes
|
17,794
|
|
|
17,244
|
|
|
16,925
|
|
|
15,696
|
|
|
13,255
|
|
|
Provision for income taxes
|
2,949
|
|
|
4,272
|
|
|
4,443
|
|
|
4,222
|
|
|
3,386
|
|
|
Net income
|
$
|
14,845
|
|
|
12,972
|
|
|
12,482
|
|
|
11,474
|
|
|
9,869
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends per common share
|
$
|
0.65
|
|
|
0.64
|
|
|
0.64
|
|
|
0.64
|
|
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.24
|
|
|
1.30
|
|
|
1.26
|
|
|
1.18
|
|
|
1.06
|
|
|
Diluted
|
1.24
|
|
|
1.29
|
|
|
1.25
|
|
|
1.17
|
|
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
$
|
282,813
|
|
|
317,413
|
|
|
368,032
|
|
|
406,981
|
|
|
314,074
|
|
Loans, net
|
1,194,577
|
|
|
845,657
|
|
|
816,228
|
|
|
767,809
|
|
|
695,835
|
|
|
Total assets
|
1,636,927
|
|
|
1,295,638
|
|
|
1,306,799
|
|
|
1,280,531
|
|
|
1,108,066
|
|
|
Total deposits
|
1,300,919
|
|
|
1,085,821
|
|
|
1,110,905
|
|
|
1,087,160
|
|
|
946,205
|
|
|
Short-term borrowings
|
56,230
|
|
|
47,000
|
|
|
42,040
|
|
|
37,387
|
|
|
16,645
|
|
|
Long-term debt
|
47,032
|
|
|
303
|
|
|
598
|
|
|
5,947
|
|
|
11,357
|
|
|
Total shareholders' equity
|
218,985
|
|
|
150,271
|
|
|
142,944
|
|
|
140,108
|
|
|
125,695
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selected Financial Ratios and Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
1.00
|
%
|
|
0.99
|
%
|
|
0.96
|
%
|
|
0.94
|
%
|
|
0.88
|
%
|
|
Return on average equity
|
7.90
|
%
|
|
8.74
|
%
|
|
8.60
|
%
|
|
8.43
|
%
|
|
8.04
|
%
|
|
Equity-to-assets ratio
|
13.38
|
%
|
|
11.60
|
%
|
|
10.94
|
%
|
|
10.94
|
%
|
|
11.34
|
%
|
|
Dividend payout ratio
|
52.42
|
%
|
|
49.23
|
%
|
|
50.79
|
%
|
|
54.24
|
%
|
|
60.38
|
%
|
|
Net interest margin, fully taxable equivalent
|
3.63
|
%
|
|
3.58
|
%
|
|
3.51
|
%
|
|
3.64
|
%
|
|
3.66
|
%
|
•
|
CFB merged with and into LCNB Corp. on May 31, 2018.
|
•
|
Expenses related to the merger with CFB totaled $2,123,000 during 2018.
|
•
|
Net gain on sales of securities was significantly greater in 2016 as compared to 2018 and 2017 primarily due to market rates at the time of the sales.
|
•
|
Other real estate owned expense was greater in 2016 as compared to 2018 and 2017 because of valuation impairment recognized during 2016.
|
•
|
Other non-interest expense for 2018 included $575,000 in net losses from sales of fixed assets, primarily due to losses incurred in the sale of two office buildings. Other non-interest expense for 2017 included $154,000 in organizational costs for LCNB Risk Management, Inc. and $113,000 in losses from sales of fixed assets, primarily due to the sale of a closed office building.
|
•
|
The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, lowered LCNB's federal corporate income tax rate from 34% to 21%, beginning in 2018. In addition, LCNB revalued its net deferred tax liability position at the end of 2017 to reflect the reduction in its federal corporate income tax rate and this revaluation resulted in a one-time income tax benefit of approximately $224,000, or $0.02 of basic and diluted earnings per common share for the year ended December 31, 2017.
|
|
Years ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
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)
|
$
|
1,038,159
|
|
|
47,489
|
|
|
4.57
|
%
|
|
$
|
822,452
|
|
|
36,571
|
|
|
4.45
|
%
|
|
$
|
792,526
|
|
|
35,600
|
|
|
4.49
|
%
|
Interest-bearing demand deposits
|
5,164
|
|
|
136
|
|
|
2.63
|
%
|
|
7,972
|
|
|
88
|
|
|
1.10
|
%
|
|
12,394
|
|
|
59
|
|
|
0.48
|
%
|
|||
Interest-bearing time deposits
|
4,008
|
|
|
58
|
|
|
1.45
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Federal Reserve Bank stock
|
3,268
|
|
|
196
|
|
|
6.00
|
%
|
|
2,732
|
|
|
164
|
|
|
6.00
|
%
|
|
2,732
|
|
|
164
|
|
|
6.00
|
%
|
|||
Federal Home Loan Bank stock
|
4,346
|
|
|
259
|
|
|
5.96
|
%
|
|
3,638
|
|
|
182
|
|
|
5.00
|
%
|
|
3,638
|
|
|
146
|
|
|
4.01
|
%
|
|||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Equity securities
|
3,782
|
|
|
104
|
|
|
2.75
|
%
|
|
3,249
|
|
|
89
|
|
|
2.74
|
%
|
|
3,230
|
|
|
115
|
|
|
3.56
|
%
|
|||
Debt securities, taxable
|
165,300
|
|
|
3,666
|
|
|
2.22
|
%
|
|
205,669
|
|
|
4,239
|
|
|
2.06
|
%
|
|
240,329
|
|
|
4,467
|
|
|
1.86
|
%
|
|||
Debt securities, non-taxable (2)
|
123,135
|
|
|
3,400
|
|
|
2.76
|
%
|
|
143,394
|
|
|
4,815
|
|
|
3.36
|
%
|
|
140,692
|
|
|
4,862
|
|
|
3.46
|
%
|
|||
Total earning assets
|
1,347,162
|
|
|
55,308
|
|
|
4.11
|
%
|
|
1,189,106
|
|
|
46,148
|
|
|
3.88
|
%
|
|
1,195,541
|
|
|
45,413
|
|
|
3.80
|
%
|
|||
Non-earning assets
|
145,601
|
|
|
|
|
|
|
|
|
123,800
|
|
|
|
|
|
|
|
|
112,909
|
|
|
|
|
|
|
|
|||
Allowance for loan losses
|
(3,822
|
)
|
|
|
|
|
|
|
|
(3,405
|
)
|
|
|
|
|
|
|
|
(3,318
|
)
|
|
|
|
|
|
|
|||
Total assets
|
$
|
1,488,941
|
|
|
|
|
|
|
|
|
$
|
1,309,501
|
|
|
|
|
|
|
|
|
$
|
1,305,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Savings deposits
|
$
|
689,322
|
|
|
1,332
|
|
|
0.19
|
%
|
|
$
|
645,471
|
|
|
594
|
|
|
0.09
|
%
|
|
$
|
654,891
|
|
|
652
|
|
|
0.10
|
%
|
IRA and time certificates
|
253,524
|
|
|
4,421
|
|
|
1.74
|
%
|
|
205,540
|
|
|
2,784
|
|
|
1.35
|
%
|
|
217,228
|
|
|
2,788
|
|
|
1.28
|
%
|
|||
Short-term borrowings
|
13,967
|
|
|
311
|
|
|
2.23
|
%
|
|
23,976
|
|
|
209
|
|
|
0.87
|
%
|
|
17,952
|
|
|
38
|
|
|
0.21
|
%
|
|||
Long-term debt
|
16,789
|
|
|
361
|
|
|
2.15
|
%
|
|
421
|
|
|
12
|
|
|
2.85
|
%
|
|
826
|
|
|
26
|
|
|
3.15
|
%
|
|||
Total interest-bearing liabilities
|
973,602
|
|
|
6,425
|
|
|
0.66
|
%
|
|
875,408
|
|
|
3,599
|
|
|
0.41
|
%
|
|
890,897
|
|
|
3,504
|
|
|
0.39
|
%
|
|||
Demand deposits
|
315,229
|
|
|
|
|
|
|
|
|
274,855
|
|
|
|
|
|
|
|
|
259,060
|
|
|
|
|
|
|
|
|||
Other liabilities
|
12,195
|
|
|
|
|
|
|
|
|
10,795
|
|
|
|
|
|
|
|
|
10,014
|
|
|
|
|
|
|
|
|||
Capital
|
187,915
|
|
|
|
|
|
|
|
|
148,443
|
|
|
|
|
|
|
|
|
145,161
|
|
|
|
|
|
|
|
|||
Total liabilities and capital
|
$
|
1,488,941
|
|
|
|
|
|
|
|
|
$
|
1,309,501
|
|
|
|
|
|
|
|
|
$
|
1,305,132
|
|
|
|
|
|
|
|
Net interest rate spread (3)
|
|
|
|
|
|
|
3.45
|
%
|
|
|
|
|
|
|
|
3.47
|
%
|
|
|
|
|
|
|
|
3.41
|
%
|
|||
Net interest income and net interest margin on a tax equivalent basis (4)
|
|
|
|
48,883
|
|
|
3.63
|
%
|
|
|
|
|
42,549
|
|
|
3.58
|
%
|
|
|
|
|
41,909
|
|
|
3.51
|
%
|
|||
Ratio of interest-earning assets to interest-bearing liabilities
|
138.37
|
%
|
|
|
|
|
|
|
|
135.83
|
%
|
|
|
|
|
|
|
|
134.20
|
%
|
|
|
|
|
|
|
(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 21% for 2018 and 34% for 2017 and 2016.
|
(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,
|
|||||||||||||||||
|
2018 vs. 2017
|
|
2017 vs. 2016
|
|||||||||||||||
|
Increase (decrease) due to
|
|
Increase (decrease) due to
|
|||||||||||||||
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
|||||||
|
(In thousands)
|
|||||||||||||||||
Interest income attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans (1)
|
$
|
9,840
|
|
|
1,078
|
|
|
10,918
|
|
|
1,334
|
|
|
(363
|
)
|
|
971
|
|
Interest-bearing demand deposits
|
(40
|
)
|
|
88
|
|
|
48
|
|
|
(27
|
)
|
|
56
|
|
|
29
|
|
|
Interest-bearing time deposits
|
58
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Federal Reserve Bank stock
|
32
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Federal Home Loan Bank stock
|
39
|
|
|
38
|
|
|
77
|
|
|
—
|
|
|
36
|
|
|
36
|
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
15
|
|
|
—
|
|
|
15
|
|
|
1
|
|
|
(27
|
)
|
|
(26
|
)
|
|
Debt securities, taxable
|
(878
|
)
|
|
305
|
|
|
(573
|
)
|
|
(684
|
)
|
|
456
|
|
|
(228
|
)
|
|
Debt securities, non-taxable (2)
|
(627
|
)
|
|
(788
|
)
|
|
(1,415
|
)
|
|
92
|
|
|
(139
|
)
|
|
(47
|
)
|
|
Total interest income
|
8,439
|
|
|
721
|
|
|
9,160
|
|
|
716
|
|
|
19
|
|
|
735
|
|
|
Interest expense attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits
|
43
|
|
|
695
|
|
|
738
|
|
|
(9
|
)
|
|
(49
|
)
|
|
(58
|
)
|
|
IRA and time certificates
|
734
|
|
|
903
|
|
|
1,637
|
|
|
(154
|
)
|
|
150
|
|
|
(4
|
)
|
|
Short-term borrowings
|
(116
|
)
|
|
218
|
|
|
102
|
|
|
17
|
|
|
154
|
|
|
171
|
|
|
Long-term debt
|
353
|
|
|
(4
|
)
|
|
349
|
|
|
(12
|
)
|
|
(2
|
)
|
|
(14
|
)
|
|
Total interest expense
|
1,014
|
|
|
1,812
|
|
|
2,826
|
|
|
(158
|
)
|
|
253
|
|
|
95
|
|
|
Net interest income
|
$
|
7,425
|
|
|
(1,091
|
)
|
|
6,334
|
|
|
874
|
|
|
(234
|
)
|
|
640
|
|
(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 21% for 2018 and 34% for 2017 and 2016.
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Dollars in thousands)
|
||||||||||||||
Balance – Beginning of year
|
$
|
3,403
|
|
|
3,575
|
|
|
3,129
|
|
|
3,121
|
|
|
3,588
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans charged off:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
—
|
|
|
—
|
|
|
234
|
|
|
100
|
|
|
261
|
|
|
Commercial, secured by real estate
|
145
|
|
|
462
|
|
|
185
|
|
|
1,133
|
|
|
573
|
|
|
Residential real estate
|
234
|
|
|
225
|
|
|
127
|
|
|
304
|
|
|
652
|
|
|
Consumer
|
135
|
|
|
90
|
|
|
85
|
|
|
52
|
|
|
129
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
—
|
|
|
Other loans, including deposit overdrafts
|
179
|
|
|
138
|
|
|
119
|
|
|
74
|
|
|
79
|
|
|
Total loans charged off
|
693
|
|
|
915
|
|
|
750
|
|
|
1,730
|
|
|
1,694
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
1
|
|
|
99
|
|
|
26
|
|
|
7
|
|
|
42
|
|
|
Commercial, secured by real estate
|
239
|
|
|
113
|
|
|
98
|
|
|
96
|
|
|
63
|
|
|
Residential real estate
|
71
|
|
|
140
|
|
|
52
|
|
|
107
|
|
|
40
|
|
|
Consumer
|
13
|
|
|
114
|
|
|
53
|
|
|
60
|
|
|
108
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
—
|
|
|
Other loans, including deposit overdrafts
|
89
|
|
|
62
|
|
|
54
|
|
|
35
|
|
|
44
|
|
|
Total recoveries
|
413
|
|
|
528
|
|
|
283
|
|
|
372
|
|
|
297
|
|
|
Net charge offs
|
280
|
|
|
387
|
|
|
467
|
|
|
1,358
|
|
|
1,397
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Provision charged to operations
|
923
|
|
|
215
|
|
|
913
|
|
|
1,366
|
|
|
930
|
|
|
Balance - End of year
|
$
|
4,046
|
|
|
3,403
|
|
|
3,575
|
|
|
3,129
|
|
|
3,121
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of net charge-offs during the period to average loans outstanding
|
0.03
|
%
|
|
0.05
|
%
|
|
0.06
|
%
|
|
0.18
|
%
|
|
0.21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of allowance for loan losses to total loans at year-end
|
0.34
|
%
|
|
0.40
|
%
|
|
0.44
|
%
|
|
0.41
|
%
|
|
0.45
|
%
|
|
|
|
|
|
|
|
Increase (Decrease)
|
||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
|
(In thousands)
|
||||||||||||||
Fiduciary income
|
$
|
3,958
|
|
|
3,473
|
|
|
3,286
|
|
|
485
|
|
|
187
|
|
Service charges and fees on deposit accounts
|
5,590
|
|
|
5,236
|
|
|
5,008
|
|
|
354
|
|
|
228
|
|
|
Net gains (losses) on sales of securities
|
(8
|
)
|
|
233
|
|
|
1,082
|
|
|
(241
|
)
|
|
(849
|
)
|
|
Bank owned life insurance income
|
738
|
|
|
867
|
|
|
746
|
|
|
(129
|
)
|
|
121
|
|
|
Net gains from sales of loans
|
223
|
|
|
166
|
|
|
244
|
|
|
57
|
|
|
(78
|
)
|
|
Other operating income
|
549
|
|
|
483
|
|
|
487
|
|
|
66
|
|
|
(4
|
)
|
|
Total non-interest income
|
11,050
|
|
|
10,458
|
|
|
10,853
|
|
|
592
|
|
|
(395
|
)
|
•
|
Fiduciary income increased during 2018 due to an increase in assets managed. Fiduciary income increased during 2017 due to an increase in assets managed and to fee adjustments.
|
•
|
Service charges and fees on deposit accounts increased during 2018 primarily due to fees earned from an Insured Cash Sweep (ICS®) product that was introduced during the second quarter 2017 and from an increase in debit card income. Debit card income benefited from more cards outstanding due to the merger with CFB and greater depositor utilization of the cards. Service charges and fees on deposit accounts increased during 2017 due to fee adjustments on certain services and greater customer utilization of various services.
|
•
|
Net gains (losses) on sales of securities were less during 2017 and 2018 as compared to 2016 primarily due to a lower volume of sales.
|
•
|
Bank owned life insurance income was greater in 2017 primarily due to mortality benefits. No mortality benefits were received in 2018 or 2016.
|
|
|
|
|
|
|
|
Increase (Decrease)
|
||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||
|
(In thousands)
|
||||||||||||||
Salaries and employee benefits
|
$
|
21,279
|
|
|
18,585
|
|
|
18,215
|
|
|
2,694
|
|
|
370
|
|
Equipment expenses
|
1,138
|
|
|
1,172
|
|
|
1,048
|
|
|
(34
|
)
|
|
124
|
|
|
Occupancy expense, net
|
2,861
|
|
|
2,613
|
|
|
2,271
|
|
|
248
|
|
|
342
|
|
|
State financial institutions tax
|
1,197
|
|
|
1,137
|
|
|
1,114
|
|
|
60
|
|
|
23
|
|
|
Marketing
|
1,119
|
|
|
873
|
|
|
696
|
|
|
246
|
|
|
177
|
|
|
Amortization of intangibles
|
922
|
|
|
751
|
|
|
753
|
|
|
171
|
|
|
(2
|
)
|
|
FDIC premiums
|
419
|
|
|
423
|
|
|
547
|
|
|
(4
|
)
|
|
(124
|
)
|
|
ATM expense
|
580
|
|
|
572
|
|
|
721
|
|
|
8
|
|
|
(149
|
)
|
|
Computer maintenance and supplies
|
990
|
|
|
882
|
|
|
790
|
|
|
108
|
|
|
92
|
|
|
Telephone expense
|
649
|
|
|
735
|
|
|
746
|
|
|
(86
|
)
|
|
(11
|
)
|
|
Contracted services
|
1,547
|
|
|
1,255
|
|
|
1,033
|
|
|
292
|
|
|
222
|
|
|
Other real estate owned
|
20
|
|
|
10
|
|
|
624
|
|
|
10
|
|
|
(614
|
)
|
|
Merger-related expenses
|
2,123
|
|
|
118
|
|
|
—
|
|
|
2,005
|
|
|
118
|
|
|
Other non-interest expense
|
5,658
|
|
|
4,737
|
|
|
4,703
|
|
|
921
|
|
|
34
|
|
|
Total non-interest expense
|
40,502
|
|
|
33,863
|
|
|
33,261
|
|
|
6,639
|
|
|
602
|
|
•
|
Salaries and employee benefits were 14.5% greater in 2018 than in 2017 and 2017 was 2.0% greater than in 2016. The increases for both years were primarily due to salary and wage increases, newly hired employees, and increased health insurance costs, partially offset by net decreases in pension expenses. CFB employees retained and increased incentive payments were also factors during 2018. The number of full-time equivalent employees was 325 at December 31, 2018, 310 at December 31, 2017, and 282 at December 31, 2016.
|
•
|
Equipment expenses were greater during 2018 and 2017 as compared to 2016 primarily due to depreciation expense on furniture and equipment purchased for the new Operations Center, which went into service during March 2017.
|
•
|
Occupancy expense for 2018 increased primarily due to increased branch rental expense and increased depreciation of bank premises. The increase in branch rental expense primarily reflects rent paid for the new Worthington Office, previously the CFB office. Occupancy expense for 2017 increased primarily due to increased depreciation on bank premises and, secondarily, to increased maintenance-related expenses, both primarily due to the new Operations Center.
|
•
|
Marketing expense increased in 2018 primarily due to promotion costs for new checking products introduced in 2018, increased marketing activities in the Columbus area, and expanded used of television, radio, and digital methods of advertising. Marketing expense increased in 2017 primarily due to expanded use of television and digital methods of advertising.
|
•
|
FDIC premiums were lower in 2018 and 2017 as compared to 2016 primarily due to a change in the calculation method used to determine periodic premiums.
|
•
|
ATM expense for 2017 decreased primarily due to a change in the ATM network that processes PIN-based transactions.
|
•
|
Computer maintenance and supplies increased in 2017 and 2018 due to increased technology and software related expenditures designed to offer technological convenience to customers, to protect the integrity of its data systems and software, and to protect the confidentiality of customer information.
|
•
|
Contracted services increased in 2018 due to additional fees paid for loan and deposit system upgrades and improvements and to general price increases on other contracted services. Contracted services for 2017 increased largely due to fees paid to professional placement services firms, enhanced utilization of loan review specialists, fees related to an after-hours call answering service, and costs related to moving departments from the Main Office to the Operations Center.
|
•
|
Other real estate owned expense was greater in 2016 primarily due to impairment charges recognized on a commercial property.
|
•
|
Merger-related expenses for 2018 and 2017 are due to the acquisition of CFB and are primarily comprised of various professional fees, costs to prepare and distribute the proxy statement/prospectus, and costs to merge CFB's data system into LCNB's system.
|
•
|
Other non-interest expense for 2018 included $575,000 in net losses from sales of fixed assets, primarily due to the sale of two office buildings. Other non-interest expense for 2017 included $154,000 in organizational costs for LCNB Risk Management, Inc. and $113,000 in losses from sales of fixed assets, primarily due to the sale of a closed office building. Other non-interest expense for 2016 included a $251,000 penalty incurred during the first quarter 2016 to pre-pay a Federal Home Loan Bank borrowing. The borrowing bore an interest rate of 5.25% and was paid off to reduce future interest expense.
|
|
|
|
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
|
$
|
56,230
|
|
|
56,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-term debt obligations
|
47,032
|
|
|
6,052
|
|
|
30,980
|
|
|
10,000
|
|
|
—
|
|
|
Operating lease obligations
|
4,868
|
|
|
449
|
|
|
761
|
|
|
400
|
|
|
3,258
|
|
|
Estimated pension plan contribution for 2019
|
160
|
|
|
160
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Funding commitments for affordable housing tax credit limited partnerships
|
3,372
|
|
|
1,024
|
|
|
1,462
|
|
|
316
|
|
|
570
|
|
|
Estimated capital expenditure obligations
|
185
|
|
|
185
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Certificates of deposit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$100,000 and over
|
135,269
|
|
|
68,632
|
|
|
48,461
|
|
|
17,780
|
|
|
396
|
|
|
Other time certificates
|
161,601
|
|
|
67,458
|
|
|
68,132
|
|
|
24,205
|
|
|
1,806
|
|
|
Total
|
$
|
408,717
|
|
|
200,190
|
|
|
149,796
|
|
|
52,701
|
|
|
6,030
|
|
|
|
|
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
|
$
|
28,015
|
|
|
28,015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Unused lines of credit
|
216,727
|
|
|
73,815
|
|
|
68,937
|
|
|
22,052
|
|
|
51,923
|
|
|
Standby letters of credit
|
1,080
|
|
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
245,822
|
|
|
102,910
|
|
|
68,937
|
|
|
22,052
|
|
|
51,923
|
|
Rate Shock Scenario in
Basis Points
|
|
Amount
(In thousands)
|
|
$ Change in
Net Interest
Income
|
|
% Change in
Net Interest
Income
|
||||
Up 400
|
|
$
|
60,699
|
|
|
3,157
|
|
|
5.49
|
%
|
Up 300
|
|
59,918
|
|
|
2,376
|
|
|
4.13
|
%
|
|
Up 200
|
|
59,104
|
|
|
1,562
|
|
|
2.71
|
%
|
|
Up 100
|
|
58,328
|
|
|
786
|
|
|
1.37
|
%
|
|
Base
|
|
57,542
|
|
|
—
|
|
|
—
|
%
|
|
Down 100
|
|
56,873
|
|
|
(669
|
)
|
|
(1.16
|
)%
|
Rate Shock Scenario in
Basis Points
|
|
Amount
(In thousands)
|
|
$ Change in
EVE
|
|
% Change in
EVE
|
||||
Up 400
|
|
$
|
221,236
|
|
|
3,637
|
|
|
1.67
|
%
|
Up 300
|
|
222,913
|
|
|
5,314
|
|
|
2.44
|
%
|
|
Up 200
|
|
223,365
|
|
|
5,766
|
|
|
2.65
|
%
|
|
Up 100
|
|
221,683
|
|
|
4,084
|
|
|
1.88
|
%
|
|
Base
|
|
217,599
|
|
|
—
|
|
|
—
|
%
|
|
Down 100
|
|
218,042
|
|
|
443
|
|
|
0.20
|
%
|
/s/ Steve P. Foster
|
|
/s/ Robert C. Haines II
|
|
Steve P. Foster
|
|
Robert C. Haines II
|
|
Chief Executive Officer
|
|
Executive Vice President &
|
|
March 6, 2019
|
|
Chief Financial Officer
|
|
|
|
March 6, 2019
|
|
/s/ BKD, LLP
|
|
|
|
BKD,
LLP
|
|
|
|
|
|
|
|
Cincinnati, Ohio
|
|
|
|
March 6, 2019
|
|
|
|
/s/ BKD, LLP
|
|
|
BKD,
LLP
|
|
|
|
|
|
We have served as the Company’s auditor since 2014.
|
|
|
|
|
|
Cincinnati, Ohio
|
|
|
March 6, 2019
|
|
|
|
2018
|
|
2017
|
|||
ASSETS:
|
|
|
|
|||
Cash and due from banks
|
$
|
18,310
|
|
|
21,159
|
|
Interest-bearing demand deposits
|
1,730
|
|
|
4,227
|
|
|
Total cash and cash equivalents
|
20,040
|
|
|
25,386
|
|
|
|
|
|
|
|||
Interest-bearing time deposits
|
996
|
|
|
—
|
|
|
Investment securities:
|
|
|
|
|||
Equity securities with a readily determinable fair value, at fair value
|
2,078
|
|
|
2,160
|
|
|
Equity securities without a readily determinable fair value, at cost
|
2,099
|
|
|
1,099
|
|
|
Debt securities, available-for-sale, at fair value
|
238,421
|
|
|
275,213
|
|
|
Debt securities, held-to-maturity, at cost
|
29,721
|
|
|
32,571
|
|
|
Federal Reserve Bank stock, at cost
|
4,653
|
|
|
2,732
|
|
|
Federal Home Loan Bank stock, at cost
|
4,845
|
|
|
3,638
|
|
|
Loans, net
|
1,194,577
|
|
|
845,657
|
|
|
Premises and equipment, net
|
32,627
|
|
|
34,927
|
|
|
Goodwill
|
59,221
|
|
|
30,183
|
|
|
Core deposit and other intangibles
|
5,042
|
|
|
3,799
|
|
|
Bank owned life insurance
|
28,723
|
|
|
27,985
|
|
|
Other assets
|
13,884
|
|
|
10,288
|
|
|
TOTAL ASSETS
|
$
|
1,636,927
|
|
|
1,295,638
|
|
|
|
|
|
|||
LIABILITIES:
|
|
|
|
|||
Deposits:
|
|
|
|
|||
Non-interest-bearing
|
$
|
322,571
|
|
|
283,212
|
|
Interest-bearing
|
978,348
|
|
|
802,609
|
|
|
Total deposits
|
1,300,919
|
|
|
1,085,821
|
|
|
Short-term borrowings
|
56,230
|
|
|
47,000
|
|
|
Long-term debt
|
47,032
|
|
|
303
|
|
|
Accrued interest and other liabilities
|
13,761
|
|
|
12,243
|
|
|
TOTAL LIABILITIES
|
1,417,942
|
|
|
1,145,367
|
|
|
|
|
|
|
|||
COMMITMENTS AND CONTINGENT LIABILITIES
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
SHAREHOLDERS' EQUITY:
|
|
|
|
|||
Preferred shares - no par value, authorized 1,000,000 shares, none outstanding
|
—
|
|
|
—
|
|
|
Common shares - no par value; authorized 19,000,000 shares at December 31, 2018 and 2017; issued 14,070,303 and 10,776,686 shares at December 31, 2018 and 2017, respectively
|
141,170
|
|
|
76,977
|
|
|
Retained earnings
|
94,547
|
|
|
87,301
|
|
|
Treasury shares at cost, 775,027 and 753,627 shares at December 31, 2018 and 2017, respectively
|
(12,013
|
)
|
|
(11,665
|
)
|
|
Accumulated other comprehensive loss, net of taxes
|
(4,719
|
)
|
|
(2,342
|
)
|
|
TOTAL SHAREHOLDERS' EQUITY
|
218,985
|
|
|
150,271
|
|
|
|
|
|
|
|||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
1,636,927
|
|
|
1,295,638
|
|
|
2018
|
|
2017
|
|
2016
|
||||
INTEREST INCOME:
|
|
|
|
|
|
||||
Interest and fees on loans
|
$
|
47,489
|
|
|
36,571
|
|
|
35,600
|
|
Dividends on equity securities:
|
|
|
|
|
|
||||
With a readily determinable fair value
|
65
|
|
|
63
|
|
|
66
|
|
|
Without a readily determinable fair value
|
39
|
|
|
26
|
|
|
49
|
|
|
Interest on debt securities:
|
|
|
|
|
|
|
|
|
|
Taxable
|
3,666
|
|
|
4,239
|
|
|
4,467
|
|
|
Non-taxable
|
2,686
|
|
|
3,130
|
|
|
3,199
|
|
|
Other investments
|
649
|
|
|
434
|
|
|
369
|
|
|
TOTAL INTEREST INCOME
|
54,594
|
|
|
44,463
|
|
|
43,750
|
|
|
|
|
|
|
|
|
||||
INTEREST EXPENSE:
|
|
|
|
|
|
|
|
|
|
Interest on deposits
|
5,753
|
|
|
3,378
|
|
|
3,440
|
|
|
Interest on short-term borrowings
|
311
|
|
|
209
|
|
|
38
|
|
|
Interest on long-term debt
|
361
|
|
|
12
|
|
|
26
|
|
|
TOTAL INTEREST EXPENSE
|
6,425
|
|
|
3,599
|
|
|
3,504
|
|
|
NET INTEREST INCOME
|
48,169
|
|
|
40,864
|
|
|
40,246
|
|
|
PROVISION FOR LOAN LOSSES
|
923
|
|
|
215
|
|
|
913
|
|
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
47,246
|
|
|
40,649
|
|
|
39,333
|
|
|
|
|
|
|
|
|
||||
NON-INTEREST INCOME:
|
|
|
|
|
|
|
|
|
|
Fiduciary income
|
3,958
|
|
|
3,473
|
|
|
3,286
|
|
|
Service charges and fees on deposit accounts
|
5,590
|
|
|
5,236
|
|
|
5,008
|
|
|
Net gains (losses) on sales of securities
|
(8
|
)
|
|
233
|
|
|
1,082
|
|
|
Bank owned life insurance income
|
738
|
|
|
867
|
|
|
746
|
|
|
Net gains from sales of loans
|
223
|
|
|
166
|
|
|
244
|
|
|
Other operating income
|
549
|
|
|
483
|
|
|
487
|
|
|
TOTAL NON-INTEREST INCOME
|
11,050
|
|
|
10,458
|
|
|
10,853
|
|
|
|
|
|
|
|
|
||||
NON-INTEREST EXPENSE:
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
21,279
|
|
|
18,585
|
|
|
18,215
|
|
|
Equipment expenses
|
1,138
|
|
|
1,172
|
|
|
1,048
|
|
|
Occupancy expense, net
|
2,861
|
|
|
2,613
|
|
|
2,271
|
|
|
State financial institutions tax
|
1,197
|
|
|
1,137
|
|
|
1,114
|
|
|
Marketing
|
1,119
|
|
|
873
|
|
|
696
|
|
|
Amortization of intangibles
|
922
|
|
|
751
|
|
|
753
|
|
|
FDIC premiums
|
419
|
|
|
423
|
|
|
547
|
|
|
ATM expense
|
580
|
|
|
572
|
|
|
721
|
|
|
Computer maintenance and supplies
|
990
|
|
|
882
|
|
|
790
|
|
|
Telephone expense
|
649
|
|
|
735
|
|
|
746
|
|
|
Contracted services
|
1,547
|
|
|
1,255
|
|
|
1,033
|
|
|
Other real estate owned
|
20
|
|
|
10
|
|
|
624
|
|
|
Merger-related expenses
|
2,123
|
|
|
118
|
|
|
—
|
|
|
Other non-interest expense
|
5,658
|
|
|
4,737
|
|
|
4,703
|
|
|
TOTAL NON-INTEREST EXPENSE
|
40,502
|
|
|
33,863
|
|
|
33,261
|
|
|
|
|
|
|
|
|
||||
INCOME BEFORE INCOME TAXES
|
17,794
|
|
|
17,244
|
|
|
16,925
|
|
|
PROVISION FOR INCOME TAXES
|
2,949
|
|
|
4,272
|
|
|
4,443
|
|
|
NET INCOME
|
$
|
14,845
|
|
|
12,972
|
|
|
12,482
|
|
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.24
|
|
|
1.30
|
|
|
1.26
|
|
Diluted
|
1.24
|
|
|
1.29
|
|
|
1.25
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
11,935,350
|
|
|
10,005,575
|
|
|
9,948,057
|
|
|
Diluted
|
11,942,253
|
|
|
10,012,511
|
|
|
9,976,370
|
|
|
Common
Shares
Outstanding
|
|
|
Common
Shares
|
|
|
Retained
Earnings
|
|
|
Treasury
Shares
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
Total
Shareholders'
Equity
|
|
|
Balance, December 31, 2015
|
9,925,547
|
|
|
$
|
76,908
|
|
|
74,629
|
|
|
(11,665
|
)
|
|
236
|
|
|
140,108
|
|
Net income
|
|
|
|
|
|
|
12,482
|
|
|
|
|
|
|
|
|
12,482
|
|
|
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,853
|
)
|
|
(2,853
|
)
|
|
Dividend Reinvestment and Stock Purchase Plan
|
21,088
|
|
|
379
|
|
|
|
|
|
|
|
|
|
|
|
379
|
|
|
Repurchase of stock warrants
|
|
|
(1,545
|
)
|
|
|
|
|
|
|
|
(1,545
|
)
|
|||||
Exercise of stock options
|
51,390
|
|
|
592
|
|
|
|
|
|
|
|
|
592
|
|
||||
Excess tax benefit on exercise and forfeiture of stock options
|
|
|
61
|
|
|
|
|
|
|
|
|
61
|
|
|||||
Compensation expense relating to stock options
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
Compensation expense relating to restricted stock
|
—
|
|
|
90
|
|
|
|
|
|
|
|
|
90
|
|
||||
Common stock dividends, $0.64 per share
|
|
|
|
|
|
|
(6,375
|
)
|
|
|
|
|
|
|
|
(6,375
|
)
|
|
Balance, December 31, 2016
|
9,998,025
|
|
|
76,490
|
|
|
80,736
|
|
|
(11,665
|
)
|
|
(2,617
|
)
|
|
142,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
|
|
|
|
|
|
12,972
|
|
|
|
|
|
|
|
|
12,972
|
|
|
Other comprehensive income, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
275
|
|
|
275
|
|
|
Dividend Reinvestment and Stock Purchase Plan
|
17,609
|
|
|
360
|
|
|
|
|
|
|
|
|
|
|
|
360
|
|
|
Exercise of stock options
|
3,398
|
|
|
51
|
|
|
|
|
|
|
|
|
51
|
|
||||
Compensation expense relating to stock options
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Compensation expense relating to restricted stock
|
4,027
|
|
|
75
|
|
|
|
|
|
|
|
|
75
|
|
||||
Common stock dividends, $0.64 per share
|
|
|
|
|
|
|
(6,407
|
)
|
|
|
|
|
|
|
|
(6,407
|
)
|
|
Balance, December 31, 2017
|
10,023,059
|
|
|
76,977
|
|
|
87,301
|
|
|
(11,665
|
)
|
|
(2,342
|
)
|
|
150,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cumulative effect of changes in accounting principles (1)
|
|
|
|
|
525
|
|
|
|
|
(525
|
)
|
|
—
|
|
||||
Balance at December 31, 2017, as adjusted
|
10,023,059
|
|
|
76,977
|
|
|
87,826
|
|
|
(11,665
|
)
|
|
(2,867
|
)
|
|
150,271
|
|
|
Net income
|
|
|
|
|
|
|
14,845
|
|
|
|
|
|
|
|
|
14,845
|
|
|
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,852
|
)
|
|
(1,852
|
)
|
|
Dividend Reinvestment and Stock Purchase Plan
|
22,936
|
|
|
416
|
|
|
|
|
|
|
|
|
|
|
|
416
|
|
|
Stock issued for acquisition of Columbus First Bancorp, Inc.
|
3,253,060
|
|
|
63,598
|
|
|
|
|
|
|
|
|
63,598
|
|
||||
Exercise of stock options
|
6,987
|
|
|
72
|
|
|
|
|
|
|
|
|
72
|
|
||||
Repurchase of common stock
|
(21,400
|
)
|
|
|
|
|
|
(348
|
)
|
|
|
|
(348
|
)
|
||||
Compensation expense relating to restricted stock
|
10,634
|
|
|
107
|
|
|
|
|
|
|
|
|
107
|
|
||||
Common stock dividends, $0.65 per share
|
|
|
|
|
|
|
(8,124
|
)
|
|
|
|
|
|
|
|
(8,124
|
)
|
|
Balance, December 31, 2018
|
13,295,276
|
|
|
$
|
141,170
|
|
|
94,547
|
|
|
(12,013
|
)
|
|
(4,719
|
)
|
|
218,985
|
|
•
|
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.
|
•
|
Fiduciary income - this includes periodic fees due from trust and investment services customers for managing the customers' financial assets. Fees are generally charged on a quarterly or annual basis and are recognized ratably throughout the period, as the services are provided on an ongoing basis.
|
•
|
Service charges and fees on deposit accounts - these include general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer, or overdraft activities. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services.
|
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.
|
|
June 30, 2018
|
|
Fair Value Adjustments
|
|
December 31, 2018
|
|||
Consideration Paid:
|
|
|
|
|
|
|||
Common shares issued (3,253,060 shares issued at $19.55 per share)
|
63,598
|
|
|
—
|
|
|
63,598
|
|
Cash paid to cancel share based payment awards
|
783
|
|
|
—
|
|
|
783
|
|
|
64,381
|
|
|
—
|
|
|
64,381
|
|
|
|
|
|
|
|
|||
Identifiable Assets Acquired:
|
|
|
|
|
|
|||
Cash and cash equivalents
|
13,679
|
|
|
—
|
|
|
13,679
|
|
Interest-bearing time deposits
|
10,350
|
|
|
—
|
|
|
10,350
|
|
Federal Home Loan Bank stock
|
1,207
|
|
|
—
|
|
|
1,207
|
|
Loans, net
|
282,748
|
|
|
(615
|
)
|
|
282,133
|
|
Loans held for sale, net
|
1,819
|
|
|
—
|
|
|
1,819
|
|
Premises and equipment
|
102
|
|
|
—
|
|
|
102
|
|
Core deposit intangible
|
2,089
|
|
|
88
|
|
|
2,177
|
|
Other real estate owned
|
35
|
|
|
—
|
|
|
35
|
|
Deferred income taxes
|
—
|
|
|
352
|
|
|
352
|
|
Other assets
|
2,022
|
|
|
(658
|
)
|
|
1,364
|
|
Total identifiable assets acquired
|
314,051
|
|
|
(833
|
)
|
|
313,218
|
|
|
|
|
|
|
|
|||
Liabilities Assumed:
|
|
|
|
|
|
|||
Deposits
|
245,036
|
|
|
(606
|
)
|
|
244,430
|
|
Short-term borrowings
|
10,000
|
|
|
—
|
|
|
10,000
|
|
Long-term debt
|
22,920
|
|
|
23
|
|
|
22,943
|
|
Deferred income taxes
|
200
|
|
|
(200
|
)
|
|
—
|
|
Other liabilities
|
491
|
|
|
11
|
|
|
502
|
|
Total liabilities assumed
|
278,647
|
|
|
(772
|
)
|
|
277,875
|
|
|
|
|
|
|
|
|||
Total Identifiable Net Assets Acquired
|
35,404
|
|
|
(61
|
)
|
|
35,343
|
|
|
|
|
|
|
|
|||
Goodwill resulting from merger
|
28,977
|
|
|
61
|
|
|
29,038
|
|
Total revenue
|
$
|
6,972
|
|
Net income
|
3,896
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Total revenue
|
$
|
64,558
|
|
|
63,779
|
|
|
61,602
|
|
Net income
|
17,858
|
|
|
15,852
|
|
|
14,407
|
|
|
Basic earnings per common share
|
1.22
|
|
|
1.20
|
|
|
1.09
|
|
|
Diluted earnings per common share
|
1.22
|
|
|
1.19
|
|
|
1.09
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
|||||
2018
|
|
|
|
|
|
|
|
|||||
Debt Securities Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
2,278
|
|
|
—
|
|
|
43
|
|
|
2,235
|
|
U.S. Agency notes
|
80,708
|
|
|
—
|
|
|
2,368
|
|
|
78,340
|
|
|
U.S. Agency mortgage-backed securities
|
57,584
|
|
|
7
|
|
|
1,981
|
|
|
55,610
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-taxable
|
86,059
|
|
|
77
|
|
|
1,422
|
|
|
84,714
|
|
|
Taxable
|
17,654
|
|
|
102
|
|
|
234
|
|
|
17,522
|
|
|
|
$
|
244,283
|
|
|
186
|
|
|
6,048
|
|
|
238,421
|
|
|
|
|
|
|
|
|
|
|||||
Debt Securities Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
26,021
|
|
|
84
|
|
|
635
|
|
|
25,470
|
|
Taxable
|
3,700
|
|
|
—
|
|
|
146
|
|
|
3,554
|
|
|
|
$
|
29,721
|
|
|
84
|
|
|
781
|
|
|
29,024
|
|
|
|
|
|
|
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|||||
Equity Securities with a Readily Determinable Fair Value:
|
|
|
|
|
|
|
|
|||||
Mutual funds
|
$
|
1,586
|
|
|
2
|
|
|
46
|
|
|
1,542
|
|
Trust preferred securities
|
49
|
|
|
1
|
|
|
—
|
|
|
50
|
|
|
Equity securities
|
475
|
|
|
97
|
|
|
4
|
|
|
568
|
|
|
|
$
|
2,110
|
|
|
100
|
|
|
50
|
|
|
2,160
|
|
|
|
|
|
|
|
|
|
|||||
Debt Securities Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
2,283
|
|
|
—
|
|
|
24
|
|
|
2,259
|
|
U.S. Agency notes
|
84,837
|
|
|
57
|
|
|
1,633
|
|
|
83,261
|
|
|
U.S. Agency mortgage-backed securities
|
68,347
|
|
|
33
|
|
|
1,227
|
|
|
67,153
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-taxable
|
102,849
|
|
|
343
|
|
|
1,018
|
|
|
102,174
|
|
|
Taxable
|
20,313
|
|
|
175
|
|
|
122
|
|
|
20,366
|
|
|
|
$
|
278,629
|
|
|
608
|
|
|
4,024
|
|
|
275,213
|
|
|
|
|
|
|
|
|
|
|||||
Debt Securities Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
28,871
|
|
|
101
|
|
|
227
|
|
|
28,745
|
|
Taxable
|
3,700
|
|
|
—
|
|
|
95
|
|
|
3,605
|
|
|
|
$
|
32,571
|
|
|
101
|
|
|
322
|
|
|
32,350
|
|
|
Less Than Twelve Months
|
|
Twelve Months or More
|
|||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||
2018
|
|
|
|
|
|
|
|
|||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
—
|
|
|
—
|
|
|
2,235
|
|
|
43
|
|
U.S. Agency notes
|
4,988
|
|
|
7
|
|
|
73,351
|
|
|
2,361
|
|
|
U.S. Agency mortgage-backed securities
|
137
|
|
|
—
|
|
|
55,217
|
|
|
1,981
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
||
Non-taxable
|
14,264
|
|
|
49
|
|
|
58,211
|
|
|
1,373
|
|
|
Taxable
|
—
|
|
|
—
|
|
|
14,407
|
|
|
234
|
|
|
|
$
|
19,389
|
|
|
56
|
|
|
203,421
|
|
|
5,992
|
|
|
|
|
|
|
|
|
|
|||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
366
|
|
|
1
|
|
|
18,588
|
|
|
634
|
|
Taxable
|
400
|
|
|
1
|
|
|
3,154
|
|
|
145
|
|
|
|
$
|
766
|
|
|
2
|
|
|
21,742
|
|
|
779
|
|
|
|
|
|
|
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
2,259
|
|
|
24
|
|
|
—
|
|
|
—
|
|
U.S. Agency notes
|
33,651
|
|
|
344
|
|
|
44,560
|
|
|
1,289
|
|
|
U.S. Agency mortgage-backed securities
|
24,433
|
|
|
142
|
|
|
41,080
|
|
|
1,085
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
36,348
|
|
|
315
|
|
|
24,197
|
|
|
703
|
|
|
Taxable
|
11,068
|
|
|
114
|
|
|
1,032
|
|
|
8
|
|
|
|
$
|
107,759
|
|
|
939
|
|
|
110,869
|
|
|
3,085
|
|
|
|
|
|
|
|
|
|
|||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
9,824
|
|
|
133
|
|
|
3,542
|
|
|
94
|
|
Taxable
|
—
|
|
|
—
|
|
|
3,205
|
|
|
95
|
|
|
|
$
|
9,824
|
|
|
133
|
|
|
6,747
|
|
|
189
|
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
|||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|||||
Due within one year
|
$
|
14,768
|
|
|
14,699
|
|
|
3,200
|
|
|
3,195
|
|
Due from one to five years
|
112,871
|
|
|
110,829
|
|
|
3,143
|
|
|
3,069
|
|
|
Due from five to ten years
|
57,336
|
|
|
55,633
|
|
|
7,982
|
|
|
7,787
|
|
|
Due after ten years
|
1,724
|
|
|
1,650
|
|
|
15,396
|
|
|
14,973
|
|
|
|
186,699
|
|
|
182,811
|
|
|
29,721
|
|
|
29,024
|
|
|
U.S. Agency mortgage-backed securities
|
57,584
|
|
|
55,610
|
|
|
—
|
|
|
—
|
|
|
|
$
|
244,283
|
|
|
238,421
|
|
|
29,721
|
|
|
29,024
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Proceeds from sales
|
$
|
8,545
|
|
|
43,246
|
|
|
92,455
|
|
Gross realized gains
|
21
|
|
|
247
|
|
|
1,103
|
|
|
Gross realized losses
|
29
|
|
|
14
|
|
|
21
|
|
|
2018
|
|
2017
|
|||||||||
|
Amortized
Cost |
|
Fair
Value |
|
Amortized Cost
|
|
Fair Value
|
|||||
Mutual funds
|
$
|
1,651
|
|
|
1,559
|
|
|
1,586
|
|
|
1,542
|
|
Trust preferred securities
|
—
|
|
|
—
|
|
|
49
|
|
|
50
|
|
|
Equity securities
|
471
|
|
|
519
|
|
|
475
|
|
|
568
|
|
|
Total equity securities with a readily determinable fair value
|
$
|
2,122
|
|
|
2,078
|
|
|
2,110
|
|
|
2,160
|
|
Net losses recognized
|
$
|
(73
|
)
|
Less net realized gains on equity securities sold
|
20
|
|
|
Unrealized losses recognized and still held at period end
|
$
|
(93
|
)
|
|
2018
|
|
2017
|
|||
Commercial and industrial
|
$
|
77,740
|
|
|
36,057
|
|
Commercial, secured by real estate
|
740,647
|
|
|
527,947
|
|
|
Residential real estate
|
349,127
|
|
|
251,582
|
|
|
Consumer
|
17,283
|
|
|
17,450
|
|
|
Agricultural
|
13,297
|
|
|
15,194
|
|
|
Other loans, including deposit overdrafts
|
450
|
|
|
539
|
|
|
|
1,198,544
|
|
|
848,769
|
|
|
Deferred origination costs, net
|
79
|
|
|
291
|
|
|
|
1,198,623
|
|
|
849,060
|
|
|
Less allowance for loan losses
|
4,046
|
|
|
3,403
|
|
|
Loans-net
|
$
|
1,194,577
|
|
|
845,657
|
|
|
2018
|
|
2017
|
|||
Non-accrual loans:
|
|
|
|
|||
Commercial and industrial
|
$
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
1,767
|
|
|
2,183
|
|
|
Residential real estate
|
1,007
|
|
|
604
|
|
|
Agricultural
|
177
|
|
|
178
|
|
|
Total non-accrual loans
|
2,951
|
|
|
2,965
|
|
|
Past-due 90 days or more and still accruing
|
149
|
|
|
—
|
|
|
Total non-accrual and past-due 90 days or more and still accruing
|
3,100
|
|
|
2,965
|
|
|
Accruing restructured loans
|
10,516
|
|
|
10,469
|
|
|
Total
|
$
|
13,616
|
|
|
13,434
|
|
|
|
|
|
|||
Percentage of total non-accrual and past-due 90 days or more and still accruing to total loans
|
0.26
|
%
|
|
0.35
|
%
|
|
|
|
|
|
|||
Percentage of total non-accrual, past-due 90 days or more and still accruing, and accruing restructured loans to total loans
|
1.14
|
%
|
|
1.58
|
%
|
|
Commercial
& Industrial
|
|
Commercial,
Secured by
Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Agricultural
|
|
Other
|
|
Total
|
||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of year
|
$
|
378
|
|
|
2,178
|
|
|
717
|
|
|
76
|
|
|
53
|
|
|
1
|
|
|
3,403
|
|
Provision charged to expenses
|
21
|
|
|
473
|
|
|
213
|
|
|
133
|
|
|
(7
|
)
|
|
90
|
|
|
923
|
|
|
Losses charged off
|
—
|
|
|
(145
|
)
|
|
(234
|
)
|
|
(135
|
)
|
|
—
|
|
|
(179
|
)
|
|
(693
|
)
|
|
Recoveries
|
1
|
|
|
239
|
|
|
71
|
|
|
13
|
|
|
—
|
|
|
89
|
|
|
413
|
|
|
Balance, end of year
|
$
|
400
|
|
|
2,745
|
|
|
767
|
|
|
87
|
|
|
46
|
|
|
1
|
|
|
4,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
10
|
|
|
3
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
Collectively evaluated for impairment
|
390
|
|
|
2,742
|
|
|
718
|
|
|
87
|
|
|
46
|
|
|
1
|
|
|
3,984
|
|
|
Acquired credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance, end of year
|
$
|
400
|
|
|
2,745
|
|
|
767
|
|
|
87
|
|
|
46
|
|
|
1
|
|
|
4,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
$
|
268
|
|
|
15,101
|
|
|
1,558
|
|
|
36
|
|
|
177
|
|
|
—
|
|
|
17,140
|
|
Collectively evaluated for impairment
|
76,609
|
|
|
718,709
|
|
|
344,751
|
|
|
17,363
|
|
|
13,135
|
|
|
114
|
|
|
1,170,681
|
|
|
Acquired credit impaired loans
|
922
|
|
|
6,315
|
|
|
3,229
|
|
|
—
|
|
|
—
|
|
|
336
|
|
|
10,802
|
|
|
Balance, end of year
|
$
|
77,799
|
|
|
740,125
|
|
|
349,538
|
|
|
17,399
|
|
|
13,312
|
|
|
450
|
|
|
1,198,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of year
|
$
|
350
|
|
|
2,179
|
|
|
885
|
|
|
96
|
|
|
60
|
|
|
5
|
|
|
3,575
|
|
Provision charged to expenses
|
(71
|
)
|
|
348
|
|
|
(83
|
)
|
|
(44
|
)
|
|
(7
|
)
|
|
72
|
|
|
215
|
|
|
Losses charged off
|
—
|
|
|
(462
|
)
|
|
(225
|
)
|
|
(90
|
)
|
|
—
|
|
|
(138
|
)
|
|
(915
|
)
|
|
Recoveries
|
99
|
|
|
113
|
|
|
140
|
|
|
114
|
|
|
—
|
|
|
62
|
|
|
528
|
|
|
Balance, end of year
|
$
|
378
|
|
|
2,178
|
|
|
717
|
|
|
76
|
|
|
53
|
|
|
1
|
|
|
3,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
8
|
|
|
146
|
|
|
29
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
191
|
|
Collectively evaluated for impairment
|
370
|
|
|
2,032
|
|
|
688
|
|
|
68
|
|
|
53
|
|
|
1
|
|
|
3,212
|
|
|
Acquired credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance, end of year
|
$
|
378
|
|
|
2,178
|
|
|
717
|
|
|
76
|
|
|
53
|
|
|
1
|
|
|
3,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
$
|
303
|
|
|
11,289
|
|
|
1,351
|
|
|
47
|
|
|
177
|
|
|
—
|
|
|
13,167
|
|
Collectively evaluated for impairment
|
34,792
|
|
|
512,259
|
|
|
248,674
|
|
|
17,516
|
|
|
15,033
|
|
|
137
|
|
|
828,411
|
|
|
Acquired credit impaired loans
|
1,008
|
|
|
4,048
|
|
|
2,024
|
|
|
—
|
|
|
—
|
|
|
402
|
|
|
7,482
|
|
|
Balance, end of year
|
$
|
36,103
|
|
|
527,596
|
|
|
252,049
|
|
|
17,563
|
|
|
15,210
|
|
|
539
|
|
|
849,060
|
|
|
Commercial
& Industrial
|
|
Commercial,
Secured by
Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Agricultural
|
|
Other
|
|
Total
|
||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of year
|
$
|
244
|
|
|
1,908
|
|
|
854
|
|
|
54
|
|
|
66
|
|
|
3
|
|
|
3,129
|
|
Provision charged to expenses
|
314
|
|
|
358
|
|
|
106
|
|
|
74
|
|
|
(6
|
)
|
|
67
|
|
|
913
|
|
|
Losses charged off
|
(234
|
)
|
|
(185
|
)
|
|
(127
|
)
|
|
(85
|
)
|
|
—
|
|
|
(119
|
)
|
|
(750
|
)
|
|
Recoveries
|
26
|
|
|
98
|
|
|
52
|
|
|
53
|
|
|
—
|
|
|
54
|
|
|
283
|
|
|
Balance, end of year
|
$
|
350
|
|
|
2,179
|
|
|
885
|
|
|
96
|
|
|
60
|
|
|
5
|
|
|
3,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
9
|
|
|
55
|
|
|
100
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
177
|
|
Collectively evaluated for impairment
|
341
|
|
|
1,832
|
|
|
785
|
|
|
83
|
|
|
60
|
|
|
5
|
|
|
3,106
|
|
|
Acquired credit impaired loans
|
—
|
|
|
292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292
|
|
|
Balance, end of year
|
$
|
350
|
|
|
2,179
|
|
|
885
|
|
|
96
|
|
|
60
|
|
|
5
|
|
|
3,575
|
|
•
|
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
|
||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
74,530
|
|
|
89
|
|
|
3,180
|
|
|
—
|
|
|
77,799
|
|
Commercial, secured by real estate
|
718,233
|
|
|
768
|
|
|
21,124
|
|
|
—
|
|
|
740,125
|
|
|
Residential real estate
|
344,432
|
|
|
—
|
|
|
5,106
|
|
|
—
|
|
|
349,538
|
|
|
Consumer
|
17,381
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
17,399
|
|
|
Agricultural
|
13,116
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
13,312
|
|
|
Other
|
450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450
|
|
|
Total
|
$
|
1,168,142
|
|
|
857
|
|
|
29,624
|
|
|
—
|
|
|
1,198,623
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
35,683
|
|
|
176
|
|
|
244
|
|
|
—
|
|
|
36,103
|
|
Commercial, secured by real estate
|
506,833
|
|
|
2,180
|
|
|
18,583
|
|
|
—
|
|
|
527,596
|
|
|
Residential real estate
|
250,039
|
|
|
—
|
|
|
2,010
|
|
|
—
|
|
|
252,049
|
|
|
Consumer
|
17,522
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
17,563
|
|
|
Agricultural
|
14,233
|
|
|
—
|
|
|
977
|
|
|
—
|
|
|
15,210
|
|
|
Other
|
539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
539
|
|
|
Total
|
$
|
824,849
|
|
|
2,356
|
|
|
21,855
|
|
|
—
|
|
|
849,060
|
|
|
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
|
||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial & industrial
|
$
|
626
|
|
|
173
|
|
|
—
|
|
|
799
|
|
|
77,000
|
|
|
77,799
|
|
|
—
|
|
Commercial, secured by real estate
|
347
|
|
|
141
|
|
|
347
|
|
|
835
|
|
|
739,290
|
|
|
740,125
|
|
|
—
|
|
|
Residential real estate
|
905
|
|
|
536
|
|
|
1,046
|
|
|
2,487
|
|
|
347,051
|
|
|
349,538
|
|
|
149
|
|
|
Consumer
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
17,385
|
|
|
17,399
|
|
|
—
|
|
|
Agricultural
|
19
|
|
|
—
|
|
|
178
|
|
|
197
|
|
|
13,115
|
|
|
13,312
|
|
|
—
|
|
|
Other
|
114
|
|
|
—
|
|
|
—
|
|
|
114
|
|
|
336
|
|
|
450
|
|
|
—
|
|
|
Total
|
$
|
2,025
|
|
|
850
|
|
|
1,571
|
|
|
4,446
|
|
|
1,194,177
|
|
|
1,198,623
|
|
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,103
|
|
|
36,103
|
|
|
—
|
|
Commercial, secured by real estate
|
124
|
|
|
—
|
|
|
598
|
|
|
722
|
|
|
526,874
|
|
|
527,596
|
|
|
—
|
|
|
Residential real estate
|
362
|
|
|
135
|
|
|
496
|
|
|
993
|
|
|
251,056
|
|
|
252,049
|
|
|
—
|
|
|
Consumer
|
29
|
|
|
2
|
|
|
—
|
|
|
31
|
|
|
17,532
|
|
|
17,563
|
|
|
—
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
177
|
|
|
177
|
|
|
15,033
|
|
|
15,210
|
|
|
—
|
|
|
Other
|
82
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
457
|
|
|
539
|
|
|
—
|
|
|
Total
|
$
|
597
|
|
|
137
|
|
|
1,271
|
|
|
2,005
|
|
|
847,055
|
|
|
849,060
|
|
|
—
|
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
926
|
|
|
1,457
|
|
|
—
|
|
|
945
|
|
|
71
|
|
Commercial, secured by real estate
|
21,266
|
|
|
22,451
|
|
|
—
|
|
|
17,353
|
|
|
1,136
|
|
|
Residential real estate
|
4,122
|
|
|
4,872
|
|
|
—
|
|
|
3,580
|
|
|
258
|
|
|
Consumer
|
13
|
|
|
13
|
|
|
—
|
|
|
32
|
|
|
3
|
|
|
Agricultural
|
177
|
|
|
177
|
|
|
—
|
|
|
177
|
|
|
—
|
|
|
Other
|
336
|
|
|
475
|
|
|
—
|
|
|
379
|
|
|
41
|
|
|
Total
|
$
|
26,840
|
|
|
29,445
|
|
|
—
|
|
|
22,466
|
|
|
1,509
|
|
|
|
|
|
|
|
|
|
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
264
|
|
|
269
|
|
|
10
|
|
|
279
|
|
|
17
|
|
Commercial, secured by real estate
|
150
|
|
|
150
|
|
|
3
|
|
|
153
|
|
|
11
|
|
|
Residential real estate
|
665
|
|
|
684
|
|
|
49
|
|
|
583
|
|
|
37
|
|
|
Consumer
|
23
|
|
|
23
|
|
|
—
|
|
|
24
|
|
|
1
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
1,102
|
|
|
1,126
|
|
|
62
|
|
|
1,039
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
1,190
|
|
|
1,726
|
|
|
10
|
|
|
1,224
|
|
|
88
|
|
Commercial, secured by real estate
|
21,416
|
|
|
22,601
|
|
|
3
|
|
|
17,506
|
|
|
1,147
|
|
|
Residential real estate
|
4,787
|
|
|
5,556
|
|
|
49
|
|
|
4,163
|
|
|
295
|
|
|
Consumer
|
36
|
|
|
36
|
|
|
—
|
|
|
56
|
|
|
4
|
|
|
Agricultural
|
177
|
|
|
177
|
|
|
—
|
|
|
177
|
|
|
—
|
|
|
Other
|
336
|
|
|
475
|
|
|
—
|
|
|
379
|
|
|
41
|
|
|
Total
|
$
|
27,942
|
|
|
30,571
|
|
|
62
|
|
|
23,505
|
|
|
1,575
|
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
1,015
|
|
|
1,100
|
|
|
—
|
|
|
685
|
|
|
88
|
|
Commercial, secured by real estate
|
12,677
|
|
|
13,608
|
|
|
—
|
|
|
14,113
|
|
|
1,068
|
|
|
Residential real estate
|
2,822
|
|
|
3,516
|
|
|
—
|
|
|
3,216
|
|
|
546
|
|
|
Consumer
|
6
|
|
|
6
|
|
|
—
|
|
|
20
|
|
|
2
|
|
|
Agricultural
|
177
|
|
|
177
|
|
|
—
|
|
|
269
|
|
|
12
|
|
|
Other
|
402
|
|
|
554
|
|
|
—
|
|
|
441
|
|
|
55
|
|
|
Total
|
$
|
17,099
|
|
|
18,961
|
|
|
—
|
|
|
18,744
|
|
|
1,771
|
|
|
|
|
|
|
|
|
|
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
296
|
|
|
301
|
|
|
8
|
|
|
311
|
|
|
18
|
|
Commercial, secured by real estate
|
2,660
|
|
|
2,660
|
|
|
146
|
|
|
2,739
|
|
|
45
|
|
|
Residential real estate
|
553
|
|
|
572
|
|
|
29
|
|
|
596
|
|
|
19
|
|
|
Consumer
|
41
|
|
|
41
|
|
|
8
|
|
|
43
|
|
|
3
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
3,550
|
|
|
3,574
|
|
|
191
|
|
|
3,689
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
1,311
|
|
|
1,401
|
|
|
8
|
|
|
996
|
|
|
106
|
|
Commercial, secured by real estate
|
15,337
|
|
|
16,268
|
|
|
146
|
|
|
16,852
|
|
|
1,113
|
|
|
Residential real estate
|
3,375
|
|
|
4,088
|
|
|
29
|
|
|
3,812
|
|
|
565
|
|
|
Consumer
|
47
|
|
|
47
|
|
|
8
|
|
|
63
|
|
|
5
|
|
|
Agricultural
|
177
|
|
|
177
|
|
|
—
|
|
|
269
|
|
|
12
|
|
|
Other
|
402
|
|
|
554
|
|
|
—
|
|
|
441
|
|
|
55
|
|
|
Total
|
$
|
20,649
|
|
|
22,535
|
|
|
191
|
|
|
22,433
|
|
|
1,856
|
|
|
Average
Recorded Investment |
|
Interest
Income Recognized |
|||
2016
|
|
|
|
|||
With no related allowance recorded:
|
|
|
|
|||
Commercial & industrial
|
$
|
998
|
|
|
151
|
|
Commercial, secured by real estate
|
15,274
|
|
|
1,140
|
|
|
Residential real estate
|
3,736
|
|
|
369
|
|
|
Consumer
|
37
|
|
|
29
|
|
|
Agricultural
|
392
|
|
|
136
|
|
|
Other
|
481
|
|
|
77
|
|
|
Total
|
$
|
20,918
|
|
|
1,902
|
|
|
|
|
|
|||
With an allowance recorded:
|
|
|
|
|||
Commercial & industrial
|
$
|
341
|
|
|
19
|
|
Commercial, secured by real estate
|
4,194
|
|
|
257
|
|
|
Residential real estate
|
651
|
|
|
36
|
|
|
Consumer
|
43
|
|
|
3
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
Total
|
$
|
5,229
|
|
|
315
|
|
|
|
|
|
|||
Total:
|
|
|
|
|||
Commercial & industrial
|
$
|
1,339
|
|
|
170
|
|
Commercial, secured by real estate
|
19,468
|
|
|
1,397
|
|
|
Residential real estate
|
4,387
|
|
|
405
|
|
|
Consumer
|
80
|
|
|
32
|
|
|
Agricultural
|
392
|
|
|
136
|
|
|
Other
|
481
|
|
|
77
|
|
|
Total
|
$
|
26,147
|
|
|
2,217
|
|
|
2018
|
|
2017
|
||||||||||||||||||
|
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
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial, secured by real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential real estate
|
3
|
|
|
505
|
|
|
505
|
|
|
1
|
|
|
18
|
|
|
9
|
|
||||
Consumer
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
14
|
|
|
14
|
|
||||
Totals
|
4
|
|
|
$
|
506
|
|
|
$
|
506
|
|
|
2
|
|
|
$
|
32
|
|
|
$
|
23
|
|
|
Term Modification
|
|
Rate Modification
|
|
Interest Only
|
|
Principal Forgiveness
|
|
Combination
|
|
Total Modifications
|
|||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential real estate
|
380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
505
|
|
|
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
Total
|
$
|
380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
Consumer
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
Total
|
$
|
14
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
23
|
|
|
2018
|
|
2017
|
||
Impaired loans without a valuation allowance at the end of the period
|
380
|
|
|
—
|
|
Impaired loans with a valuation allowance at the end of the period
|
126
|
|
|
23
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Balance, beginning of year
|
$
|
396
|
|
|
428
|
|
|
488
|
|
Amount obtained through a merger
|
91
|
|
|
—
|
|
|
—
|
|
|
Amount capitalized to mortgage servicing rights
|
113
|
|
|
91
|
|
|
109
|
|
|
Amortization of mortgage servicing rights
|
(125
|
)
|
|
(123
|
)
|
|
(169
|
)
|
|
Balance, end of year
|
$
|
475
|
|
|
396
|
|
|
428
|
|
Contractually required principal at acquisition
|
281,639
|
|
Less fair value adjustment
|
1,801
|
|
Fair value of acquired loans
|
279,838
|
|
|
|
|
Contractual cash flows not expected to be collected
|
1,905
|
|
Contractually required principal at acquisition
|
|
4,989
|
|
Less contractual cash flows not expected to be collected (nonaccretable difference)
|
|
906
|
|
Expected cash flows at acquisition
|
|
4,083
|
|
Less interest component of expected cash flows (accretable discount)
|
|
151
|
|
Fair value of acquired impaired loans
|
|
3,932
|
|
|
2018
|
|
2017
|
|||
Acquired from First Capital Bancshares, Inc.
|
|
|
|
|||
Commercial & industrial
|
$
|
13
|
|
|
20
|
|
Commercial, secured by real estate
|
818
|
|
|
848
|
|
|
Residential real estate
|
911
|
|
|
947
|
|
|
Other loans, including deposit overdrafts
|
—
|
|
|
—
|
|
|
Total
|
$
|
1,742
|
|
|
1,815
|
|
|
|
|
|
|||
Acquired from Eaton National Bank & Trust Co.
|
|
|
|
|||
Commercial & industrial
|
$
|
503
|
|
|
988
|
|
Commercial, secured by real estate
|
1,547
|
|
|
1,699
|
|
|
Residential real estate
|
784
|
|
|
892
|
|
|
Other loans, including deposit overdrafts
|
336
|
|
|
402
|
|
|
Total
|
$
|
3,170
|
|
|
3,981
|
|
|
|
|
|
|||
Acquired from BNB Bancorp, Inc.
|
|
|
|
|||
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
1,396
|
|
|
1,501
|
|
|
Residential real estate
|
158
|
|
|
185
|
|
|
Other loans, including deposit overdrafts
|
—
|
|
|
—
|
|
|
Total
|
$
|
1,554
|
|
|
1,686
|
|
|
|
|
|
|||
Acquired from Columbus First Bancorp, Inc.
|
|
|
|
|||
Commercial & industrial
|
$
|
406
|
|
|
|
|
Commercial, secured by real estate
|
2,554
|
|
|
|
||
Residential real estate
|
1,376
|
|
|
|
||
Other loans, including deposit overdrafts
|
—
|
|
|
|
||
Total
|
$
|
4,336
|
|
|
|
|
|
|
|
|
|||
Total
|
|
|
|
|||
Commercial & industrial
|
$
|
922
|
|
|
1,008
|
|
Commercial, secured by real estate
|
6,315
|
|
|
4,048
|
|
|
Residential real estate
|
3,229
|
|
|
2,024
|
|
|
Other loans, including deposit overdrafts
|
336
|
|
|
402
|
|
|
Total
|
$
|
10,802
|
|
|
7,482
|
|
|
2018
|
|
2017
|
|||
Outstanding balance
|
$
|
13,371
|
|
|
9,065
|
|
Carrying amount
|
10,802
|
|
|
7,482
|
|
|
2018
|
|
2017
|
|||
Accretable discount, beginning of year
|
$
|
669
|
|
|
1,080
|
|
Accretable discount acquired during period
|
151
|
|
|
—
|
|
|
Reclass from nonaccretable discount to accretable discount
|
4
|
|
|
564
|
|
|
Less disposals
|
—
|
|
|
(170
|
)
|
|
Less accretion
|
(81
|
)
|
|
(805
|
)
|
|
Accretable discount, end of year
|
$
|
743
|
|
|
669
|
|
|
2018
|
|
2017
|
|||
Balance, beginning of year
|
$
|
—
|
|
|
—
|
|
Additions
|
244
|
|
|
974
|
|
|
Additions due to merger
|
35
|
|
|
—
|
|
|
Reductions due to sales
|
(35
|
)
|
|
(974
|
)
|
|
Balance, end of year
|
$
|
244
|
|
|
—
|
|
|
2018
|
|
2017
|
|||
Land
|
$
|
8,000
|
|
|
8,190
|
|
Buildings
|
30,903
|
|
|
31,965
|
|
|
Equipment
|
16,089
|
|
|
15,648
|
|
|
Construction in progress
|
142
|
|
|
120
|
|
|
Total
|
55,134
|
|
|
55,923
|
|
|
Less accumulated depreciation
|
22,507
|
|
|
20,996
|
|
|
Premises and equipment, net
|
$
|
32,627
|
|
|
34,927
|
|
2019
|
$
|
449
|
|
2020
|
412
|
|
|
2021
|
349
|
|
|
2022
|
212
|
|
|
2023
|
188
|
|
|
Thereafter
|
3,258
|
|
|
Total
|
$
|
4,868
|
|
|
2018
|
|
2017
|
||||
Balance, beginning of year
|
$
|
30,183
|
|
|
$
|
30,183
|
|
Additions from acquisitions
|
29,038
|
|
|
—
|
|
||
Balance, end of year
|
$
|
59,221
|
|
|
$
|
30,183
|
|
|
2018
|
|
2017
|
|||||||||||||||
|
Gross
Intangible
Assets
|
|
Accumulated
Amortization
|
|
Net
Intangible
Assets
|
|
Gross
Intangible Assets |
|
Accumulated
Amortization |
|
Net
Intangible Assets |
|||||||
Core deposit intangibles
|
$
|
8,544
|
|
|
3,977
|
|
|
4,567
|
|
|
6,458
|
|
|
3,055
|
|
|
3,403
|
|
Mortgage servicing rights
|
1,483
|
|
|
1,008
|
|
|
475
|
|
|
1,279
|
|
|
883
|
|
|
396
|
|
|
Total
|
$
|
10,027
|
|
|
4,985
|
|
|
5,042
|
|
|
7,737
|
|
|
3,938
|
|
|
3,799
|
|
2019
|
$
|
1,154
|
|
2020
|
1,140
|
|
|
2021
|
1,123
|
|
|
2022
|
546
|
|
|
2023
|
487
|
|
|
2018
|
|
2017
|
|||
Affordable housing tax credit investment
|
$
|
5,000
|
|
|
3,000
|
|
Less amortization
|
492
|
|
|
231
|
|
|
Net affordable housing tax credit investment
|
$
|
4,508
|
|
|
2,769
|
|
|
|
|
|
|||
Unfunded commitment
|
$
|
3,372
|
|
|
2,257
|
|
|
Year ended December 31,
|
||||||||
|
2018
|
|
2017
|
|
2016
|
||||
Tax credits and other tax benefits recognized
|
$
|
267
|
|
|
180
|
|
|
103
|
|
Tax credit amortization expense included in provision for income taxes
|
261
|
|
|
138
|
|
|
81
|
|
2019
|
$
|
136,090
|
|
2020
|
78,968
|
|
|
2021
|
37,625
|
|
|
2022
|
34,513
|
|
|
2023
|
7,472
|
|
|
Thereafter
|
2,202
|
|
|
|
$
|
296,870
|
|
|
Outstanding Balance
|
|
Average Rate
|
|||
2018
|
|
|
|
|||
2019
|
$
|
6,052
|
|
|
1.74
|
%
|
2020
|
18,988
|
|
|
2.40
|
%
|
|
2021
|
11,992
|
|
|
2.42
|
%
|
|
2022
|
5,000
|
|
|
2.97
|
%
|
|
2023
|
5,000
|
|
|
3.02
|
%
|
|
Total
|
$
|
47,032
|
|
|
2.45
|
%
|
|
|
|
|
|||
2017
|
|
|
|
|||
2018
|
$
|
248
|
|
|
2.82
|
%
|
2019
|
55
|
|
|
2.82
|
%
|
|
Total
|
$
|
303
|
|
|
2.82
|
%
|
|
2018
|
|
2017
|
||||||||||
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
||||||
Line of credit
|
$
|
4,230
|
|
|
3.00
|
%
|
|
$
|
—
|
|
|
—
|
%
|
FHLB short-term advance
|
52,000
|
|
|
2.48
|
%
|
|
47,000
|
|
|
1.43
|
%
|
||
|
$
|
56,230
|
|
|
2.52
|
%
|
|
$
|
47,000
|
|
|
1.43
|
%
|
|
2018
|
|
2017
|
|
2016
|
||||
Income taxes currently payable
|
$
|
2,721
|
|
|
3,018
|
|
|
3,515
|
|
Revaluation of net deferred tax liability
|
—
|
|
|
(224
|
)
|
|
—
|
|
|
Deferred income tax provision (benefit)
|
228
|
|
|
1,478
|
|
|
928
|
|
|
Provision for income taxes
|
$
|
2,949
|
|
|
4,272
|
|
|
4,443
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Statutory tax rate
|
21.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
Increase (decrease) resulting from -
|
|
|
|
|
|
|
|
|
Tax exempt interest
|
(3.1
|
)%
|
|
(6.0
|
)%
|
|
(6.3
|
)%
|
Tax exempt income on bank owned life insurance
|
(0.9
|
)%
|
|
(1.7
|
)%
|
|
(1.5
|
)%
|
Revaluation of net deferred tax liability
|
—
|
%
|
|
(1.3
|
)%
|
|
—
|
%
|
Captive insurance premium income
|
(0.9
|
)%
|
|
(0.9
|
)%
|
|
—
|
%
|
Other – net
|
0.5
|
%
|
|
0.7
|
%
|
|
0.1
|
%
|
Effective tax rate
|
16.6
|
%
|
|
24.8
|
%
|
|
26.3
|
%
|
|
2018
|
|
2017
|
|||
Deferred tax assets:
|
|
|
|
|||
Allowance for loan losses
|
$
|
849
|
|
|
715
|
|
Net unrealized losses on investment securities available-for-sale
|
1,240
|
|
|
707
|
|
|
Fair value adjustment on loans acquired from mergers
|
723
|
|
|
238
|
|
|
Deferred compensation
|
706
|
|
|
760
|
|
|
Other
|
432
|
|
|
471
|
|
|
|
3,950
|
|
|
2,891
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
Depreciation of premises and equipment
|
(1,551
|
)
|
|
(1,672
|
)
|
|
Amortization of intangibles
|
(1,499
|
)
|
|
(1,030
|
)
|
|
Prepaid expenses
|
(243
|
)
|
|
(210
|
)
|
|
Deferred loan fees
|
(1
|
)
|
|
(1
|
)
|
|
FHLB stock dividends
|
(216
|
)
|
|
(216
|
)
|
|
Fair value adjustment on securities acquired from mergers
|
(6
|
)
|
|
(9
|
)
|
|
|
(3,516
|
)
|
|
(3,138
|
)
|
|
Net deferred tax (liabilities) assets
|
$
|
434
|
|
|
(247
|
)
|
|
2018
|
|
2017
|
|||
Commitments to extend credit:
|
|
|
|
|||
Commercial loans
|
$
|
23,978
|
|
|
18,964
|
|
Other loans:
|
|
|
|
|||
Fixed rate
|
2,961
|
|
|
2,747
|
|
|
Adjustable rate
|
1,077
|
|
|
1,150
|
|
|
Unused lines of credit:
|
|
|
|
|||
Fixed rate
|
31,446
|
|
|
20,984
|
|
|
Adjustable rate
|
169,031
|
|
|
90,147
|
|
|
Unused overdraft protection amounts on demand and NOW accounts
|
16,249
|
|
|
16,441
|
|
|
Standby letters of credit
|
1,080
|
|
|
294
|
|
|
|
$
|
245,822
|
|
|
150,727
|
|
|
Minimum
Requirement
|
|
Minimum Requirement with Capital Conservation Buffer for 2018
|
|
To Be Considered
Well-Capitalized
|
|||
Ratio of Common Equity Tier 1 Capital to risk-weighted assets
|
4.5
|
%
|
|
6.375
|
%
|
|
6.5
|
%
|
Ratio of tier 1 capital to risk-weighted assets
|
6.0
|
%
|
|
7.875
|
%
|
|
8.0
|
%
|
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets
|
8.0
|
%
|
|
9.875
|
%
|
|
10.0
|
%
|
Leverage ratio (tier 1 capital to adjusted quarterly average total assets)
|
4.0
|
%
|
|
N/A
|
|
|
5.0
|
%
|
|
2018
|
|
2017
|
||
Regulatory Capital:
|
|
|
|
||
Shareholders' equity
|
215,395
|
|
|
148,163
|
|
Goodwill and other intangible assets
|
(63,788
|
)
|
|
(32,906
|
)
|
Accumulated other comprehensive loss
|
4,719
|
|
|
2,859
|
|
Tier 1 risk-based capital
|
156,326
|
|
|
118,116
|
|
Eligible allowance for loan losses
|
4,046
|
|
|
3,403
|
|
Total risk-based capital
|
160,372
|
|
|
121,519
|
|
Capital Ratios:
|
|
|
|
|
|
Common Equity Tier 1 Capital to risk-weighted assets
|
12.65
|
%
|
|
13.07
|
%
|
Tier 1 capital to risk-weighted assets
|
12.65
|
%
|
|
13.07
|
%
|
Total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets
|
12.98
|
%
|
|
13.45
|
%
|
Leverage ratio (tier 1 capital to adjusted quarterly average total assets)
|
9.96
|
%
|
|
9.36
|
%
|
|
2018
|
|
2017
|
|||||||||||||||
|
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
|
$
|
(2,200
|
)
|
|
(142
|
)
|
|
(2,342
|
)
|
|
(2,633
|
)
|
|
16
|
|
|
(2,617
|
)
|
Cumulative effect of changes in accounting principles
|
(498
|
)
|
|
(27
|
)
|
|
(525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance at beginning of period, as adjusted
|
(2,698
|
)
|
|
(169
|
)
|
|
(2,867
|
)
|
|
(2,633
|
)
|
|
16
|
|
|
(2,617
|
)
|
|
Before reclassifications
|
(1,939
|
)
|
|
81
|
|
|
(1,858
|
)
|
|
585
|
|
|
(158
|
)
|
|
427
|
|
|
Reclassifications
|
6
|
|
|
—
|
|
|
6
|
|
|
(152
|
)
|
|
—
|
|
|
(152
|
)
|
|
Balance at end of year
|
$
|
(4,631
|
)
|
|
(88
|
)
|
|
(4,719
|
)
|
|
(2,200
|
)
|
|
(142
|
)
|
|
(2,342
|
)
|
|
2018
|
|
2017
|
|
Affected Line Item in the Consolidated Statements of Income
|
|||
Realized gain on sales of securities
|
$
|
(8
|
)
|
|
233
|
|
|
Net gain on sale of securities
|
Less provision for income taxes
|
(2
|
)
|
|
81
|
|
|
Provision for income taxes
|
|
Reclassification adjustment, net of taxes
|
$
|
(6
|
)
|
|
152
|
|
|
|
Legal name
|
|
Pentegra Defined Benefit Plan for Financial Institutions
|
Plan's employer identification number
|
|
13-5645888
|
Plan number
|
|
333
|
|
2018
|
|
2017
|
|
2016
|
||||
Qualified noncontributory defined benefit retirement plan
|
$
|
1,048
|
|
|
1,054
|
|
|
969
|
|
401(k) plan
|
457
|
|
|
374
|
|
|
359
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Service cost
|
$
|
—
|
|
|
—
|
|
|
41
|
|
Interest cost
|
69
|
|
|
69
|
|
|
78
|
|
|
Amortization of unrecognized (gain) loss
|
16
|
|
|
—
|
|
|
168
|
|
|
Net periodic pension cost
|
$
|
85
|
|
|
69
|
|
|
287
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Projected benefit obligation at beginning of year
|
$
|
1,971
|
|
|
1,727
|
|
|
1,843
|
|
Service cost
|
—
|
|
|
—
|
|
|
41
|
|
|
Interest cost
|
69
|
|
|
69
|
|
|
78
|
|
|
Actuarial (gain) or loss
|
(86
|
)
|
|
238
|
|
|
(209
|
)
|
|
Benefits paid
|
(54
|
)
|
|
(63
|
)
|
|
(26
|
)
|
|
Projected benefit obligation at end of year
|
$
|
1,900
|
|
|
1,971
|
|
|
1,727
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Net actuarial (gain)/loss
|
$
|
88
|
|
|
141
|
|
|
(16
|
)
|
|
$
|
88
|
|
|
141
|
|
|
(16
|
)
|
2019
|
$
|
132
|
|
2020
|
132
|
|
|
2021
|
132
|
|
|
2022
|
132
|
|
|
2023
|
132
|
|
|
2024-2028
|
641
|
|
|
|
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)
|
||||
$11.00 - 12.99
|
|
13,278
|
|
|
11.98
|
|
|
2.1
|
|
13,278
|
|
|
11.98
|
|
|
2.1
|
|
|
13,278
|
|
|
11.98
|
|
|
2.1
|
|
13,278
|
|
|
11.98
|
|
|
2.1
|
|
2018
|
|
2017
|
|
2016
|
||||
Intrinsic value of options exercised
|
$
|
50
|
|
|
25
|
|
|
288
|
|
Cash received from options exercised
|
72
|
|
|
51
|
|
|
592
|
|
|
Tax benefit realized from options exercised
|
7
|
|
|
5
|
|
|
59
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Shares |
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||||||||
Outstanding at January 1,
|
8,817
|
|
|
$
|
16.44
|
|
|
8,624
|
|
|
$
|
15.47
|
|
|
16,038
|
|
|
$
|
15.47
|
|
Granted
|
10,634
|
|
|
19.20
|
|
|
4,027
|
|
|
22.60
|
|
|
—
|
|
|
—
|
|
|||
Vested
|
(2,493
|
)
|
|
17.38
|
|
|
(3,834
|
)
|
|
16.73
|
|
|
(7,414
|
)
|
|
15.47
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at December 31,
|
16,958
|
|
|
$
|
18.94
|
|
|
8,817
|
|
|
$
|
16.44
|
|
|
8,624
|
|
|
$
|
15.47
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Net income
|
$
|
14,845
|
|
|
12,972
|
|
|
12,482
|
|
Less allocation of earnings and dividends to participating securities
|
18
|
|
|
7
|
|
|
13
|
|
|
Net income allocated to common shareholders
|
14,827
|
|
|
12,965
|
|
|
12,469
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding, gross
|
11,950,360
|
|
|
10,011,358
|
|
|
9,958,300
|
|
|
Less average participating securities
|
15,010
|
|
|
5,783
|
|
|
10,243
|
|
|
Weighted average number of shares outstanding used in the calculation of basic earnings per common share
|
11,935,350
|
|
|
10,005,575
|
|
|
9,948,057
|
|
|
Add dilutive effect of:
|
|
|
|
|
|
|
|
|
|
Stock options
|
6,903
|
|
|
6,936
|
|
|
10,765
|
|
|
Stock warrants
|
—
|
|
|
—
|
|
|
17,548
|
|
|
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share
|
11,942,253
|
|
|
10,012,511
|
|
|
9,976,370
|
|
|
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.24
|
|
|
1.30
|
|
|
1.26
|
|
Diluted
|
1.24
|
|
|
1.29
|
|
|
1.25
|
|
|
2018
|
|
2017
|
|||
Beginning balance
|
$
|
1,870
|
|
|
1,447
|
|
New loans and advances
|
419
|
|
|
669
|
|
|
Change in composition of related parties
|
1,052
|
|
|
—
|
|
|
Reductions
|
(903
|
)
|
|
(246
|
)
|
|
Ending Balance
|
$
|
2,438
|
|
|
1,870
|
|
•
|
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. Level 2 inputs may include quoted prices for similar assets in active markets, quoted prices for identical assets or liabilities in markets that are not active, inputs other than quoted prices (such as interest rates or yield curves) that are observable for the asset or liability, and inputs that are derived from or corroborated by observable market data.
|
•
|
Level 3 – inputs that are unobservable for the asset or liability.
|
•
|
Fair value for U.S. Treasury notes are determined based on market quotations (level 1).
|
•
|
Fair values for the other debt securities are calculated using the discounted cash flow method for each security. The discount rates for these cash flows are estimated by the pricing service using rates observed in the market (level 2). Cash flow streams are dependent on estimated prepayment speeds and the overall structure of the securities given existing market conditions.
|
|
|
|
|
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) |
|||||
2018
|
|
|
|
|
|
|
|
||||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
||||||
Equity securities with a readily determinable fair value:
|
|
|
|
|
|
|
|
||||||
Equity securities
|
$
|
519
|
|
|
519
|
|
|
—
|
|
|
—
|
|
|
Mutual funds
|
39
|
|
|
39
|
|
|
—
|
|
|
—
|
|
||
Mutual funds measured at net asset value
|
1,520
|
|
|
1,520
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
||||||
Debt securities available-for-sale:
|
|
|
|
|
|
|
|
||||||
U.S. Treasury notes
|
2,235
|
|
|
2,235
|
|
|
—
|
|
|
—
|
|
||
U.S. Agency notes
|
78,340
|
|
|
—
|
|
|
78,340
|
|
|
—
|
|
||
U.S. Agency mortgage-backed securities
|
55,610
|
|
|
—
|
|
|
55,610
|
|
|
—
|
|
||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Non-taxable
|
84,714
|
|
|
—
|
|
|
84,714
|
|
|
—
|
|
||
Taxable
|
17,522
|
|
|
—
|
|
|
17,522
|
|
|
—
|
|
||
Total recurring fair value measurements
|
$
|
240,499
|
|
|
4,313
|
|
|
236,186
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
|
|
|
|
||
Impaired loans
|
$
|
1,039
|
|
|
—
|
|
|
—
|
|
|
1,039
|
|
|
Other real estate owned and repossessed assets
|
244
|
|
|
—
|
|
|
—
|
|
|
244
|
|
||
Total nonrecurring fair value measurements
|
$
|
1,283
|
|
|
—
|
|
|
—
|
|
|
1,283
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||
Recurring fair value measurement:
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity securities with a readily determinable fair value:
|
|
|
|
|
|
|
|
||||||
Trust preferred securities
|
50
|
|
|
50
|
|
|
—
|
|
|
—
|
|
||
Equity securities
|
568
|
|
|
568
|
|
|
—
|
|
|
—
|
|
||
Mutual funds
|
23
|
|
|
23
|
|
|
—
|
|
|
—
|
|
||
Mutual funds measured at net asset value
|
1,519
|
|
|
1,519
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
||||||
Debt securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||
U.S. Treasury notes
|
$
|
2,259
|
|
|
2,259
|
|
|
—
|
|
|
—
|
|
|
U.S. Agency notes
|
83,261
|
|
|
—
|
|
|
83,261
|
|
|
—
|
|
||
U.S. Agency mortgage-backed securities
|
67,153
|
|
|
—
|
|
|
67,153
|
|
|
—
|
|
||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Non-taxable
|
102,174
|
|
|
—
|
|
|
102,174
|
|
|
—
|
|
||
Taxable
|
20,366
|
|
|
—
|
|
|
20,366
|
|
|
—
|
|
||
Total recurring fair value measurements
|
$
|
277,373
|
|
|
4,419
|
|
|
272,954
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
|
|
|
|
||
Impaired loans
|
$
|
3,359
|
|
|
—
|
|
|
—
|
|
|
3,359
|
|
|
|
|
|
|
|
|
|
Range
|
|||||||||
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
High
|
|
Low
|
|
Weighted Average
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impaired loans
|
|
$
|
45
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
|||||||
|
|
994
|
|
|
Discounted cash flows
|
|
Discount rate
|
|
8.25
|
%
|
|
4.50
|
%
|
|
6.86
|
%
|
|
Other real estate owned
|
|
244
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impaired loans
|
|
$
|
1,753
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
|||||||
|
|
1,606
|
|
|
Discounted cash flows
|
|
Discount rate
|
|
8.25
|
%
|
|
3.25
|
%
|
|
6.27
|
%
|
|
|
|
|
|
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) |
||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
20,040
|
|
|
20,040
|
|
|
20,040
|
|
|
—
|
|
|
—
|
|
Debt securities, held-to-maturity
|
29,721
|
|
|
29,024
|
|
|
—
|
|
|
—
|
|
|
29,024
|
|
|
Federal Reserve Bank stock
|
4,653
|
|
|
4,653
|
|
|
4,653
|
|
|
—
|
|
|
—
|
|
|
Federal Home Loan Bank stock
|
4,845
|
|
|
4,845
|
|
|
4,845
|
|
|
—
|
|
|
—
|
|
|
Loans, net
|
1,194,577
|
|
|
1,183,041
|
|
|
—
|
|
|
—
|
|
|
1,183,041
|
|
|
Accrued interest receivable
|
4,317
|
|
|
4,317
|
|
|
—
|
|
|
4,317
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
1,300,919
|
|
|
1,301,298
|
|
|
1,004,057
|
|
|
297,241
|
|
|
—
|
|
|
Short-term borrowings
|
56,230
|
|
|
56,230
|
|
|
56,230
|
|
|
—
|
|
|
—
|
|
|
Long-term debt
|
47,032
|
|
|
48,255
|
|
|
—
|
|
|
48,255
|
|
|
—
|
|
|
Accrued interest payable
|
690
|
|
|
690
|
|
|
—
|
|
|
690
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
25,386
|
|
|
25,386
|
|
|
25,386
|
|
|
—
|
|
|
—
|
|
Debt securities, held-to-maturity
|
32,571
|
|
|
32,350
|
|
|
—
|
|
|
—
|
|
|
32,350
|
|
|
Federal Reserve Bank stock
|
2,732
|
|
|
2,732
|
|
|
2,732
|
|
|
—
|
|
|
—
|
|
|
Federal Home Loan Bank stock
|
3,638
|
|
|
3,638
|
|
|
3,638
|
|
|
—
|
|
|
—
|
|
|
Loans, net
|
845,657
|
|
|
813,368
|
|
|
—
|
|
|
—
|
|
|
813,368
|
|
|
Accrued interest receivable
|
3,511
|
|
|
3,511
|
|
|
—
|
|
|
3,511
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
1,085,821
|
|
|
1,087,086
|
|
|
894,046
|
|
|
193,040
|
|
|
—
|
|
|
Short-term borrowings
|
47,000
|
|
|
47,000
|
|
|
47,000
|
|
|
—
|
|
|
—
|
|
|
Long-term debt
|
303
|
|
|
307
|
|
|
—
|
|
|
307
|
|
|
—
|
|
|
Accrued interest payable
|
329
|
|
|
329
|
|
|
—
|
|
|
329
|
|
|
—
|
|
|
Three Months Ended
|
|||||||||||
|
March 31
|
|
June 30
|
|
Sep. 30
|
|
Dec. 31
|
|||||
2018
|
|
|
|
|
|
|
|
|||||
Interest income
|
$
|
11,142
|
|
|
12,538
|
|
|
15,070
|
|
|
15,844
|
|
Interest expense
|
954
|
|
|
1,170
|
|
|
1,967
|
|
|
2,334
|
|
|
Net interest income
|
10,188
|
|
|
11,368
|
|
|
13,103
|
|
|
13,510
|
|
|
Provision for loan losses
|
79
|
|
|
224
|
|
|
659
|
|
|
(39
|
)
|
|
Net interest income after provision
|
10,109
|
|
|
11,144
|
|
|
12,444
|
|
|
13,549
|
|
|
Total non-interest income
|
2,636
|
|
|
2,791
|
|
|
2,921
|
|
|
2,702
|
|
|
Total non-interest expenses
|
9,549
|
|
|
10,711
|
|
|
10,317
|
|
|
9,925
|
|
|
Income before income taxes
|
3,196
|
|
|
3,224
|
|
|
5,048
|
|
|
6,326
|
|
|
Provision for income taxes
|
483
|
|
|
486
|
|
|
847
|
|
|
1,133
|
|
|
Net income
|
$
|
2,713
|
|
|
2,738
|
|
|
4,201
|
|
|
5,193
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.27
|
|
|
0.25
|
|
|
0.32
|
|
|
0.40
|
|
Diluted
|
0.27
|
|
|
0.25
|
|
|
0.32
|
|
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
|
10,864
|
|
|
10,934
|
|
|
11,055
|
|
|
11,610
|
|
Interest expense
|
877
|
|
|
861
|
|
|
908
|
|
|
953
|
|
|
Net interest income
|
9,987
|
|
|
10,073
|
|
|
10,147
|
|
|
10,657
|
|
|
Provision for loan losses
|
15
|
|
|
222
|
|
|
(12
|
)
|
|
(10
|
)
|
|
Net interest income after provision
|
9,972
|
|
|
9,851
|
|
|
10,159
|
|
|
10,667
|
|
|
Total non-interest income
|
2,430
|
|
|
2,790
|
|
|
2,659
|
|
|
2,579
|
|
|
Total non-interest expenses
|
7,968
|
|
|
8,611
|
|
|
8,672
|
|
|
8,612
|
|
|
Income before income taxes
|
4,434
|
|
|
4,030
|
|
|
4,146
|
|
|
4,634
|
|
|
Provision for income taxes
|
1,188
|
|
|
1,027
|
|
|
1,040
|
|
|
1,017
|
|
|
Net income
|
$
|
3,246
|
|
|
3,003
|
|
|
3,106
|
|
|
3,617
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.32
|
|
|
0.30
|
|
|
0.31
|
|
|
0.37
|
|
Diluted
|
0.32
|
|
|
0.30
|
|
|
0.31
|
|
|
0.36
|
|
Condensed Balance Sheets:
|
|
|
|
|||
December 31,
|
2018
|
|
2017
|
|||
Assets:
|
|
|
|
|||
Cash on deposit with subsidiary
|
$
|
715
|
|
|
308
|
|
Investment securities available-for-sale, at fair value
|
816
|
|
|
919
|
|
|
Investment in subsidiaries
|
216,830
|
|
|
148,850
|
|
|
Other assets
|
624
|
|
|
194
|
|
|
Total assets
|
$
|
218,985
|
|
|
150,271
|
|
|
|
|
|
|||
Liabilities
|
$
|
—
|
|
|
—
|
|
|
|
|
|
|||
Shareholders' equity
|
218,985
|
|
|
150,271
|
|
|
Total liabilities and shareholders' equity
|
$
|
218,985
|
|
|
150,271
|
|
Condensed Statements of Income
|
|
|
|
|
|
||||
Year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||
Income:
|
|
|
|
|
|
||||
Dividends from subsidiaries
|
$
|
10,383
|
|
|
6,800
|
|
|
7,300
|
|
Interest and dividends
|
35
|
|
|
36
|
|
|
38
|
|
|
Net gain on sales of securities
|
—
|
|
|
14
|
|
|
8
|
|
|
Other income
|
(66
|
)
|
|
—
|
|
|
—
|
|
|
Total income
|
10,352
|
|
|
6,850
|
|
|
7,346
|
|
|
|
|
|
|
|
|
||||
Total expenses
|
1,668
|
|
|
1,290
|
|
|
1,014
|
|
|
|
|
|
|
|
|
||||
Income before income tax expense/benefit and equity in undistributed income of subsidiaries
|
8,684
|
|
|
5,560
|
|
|
6,332
|
|
|
Income tax benefit
|
341
|
|
|
380
|
|
|
336
|
|
|
Equity in undistributed income of subsidiaries
|
5,820
|
|
|
7,032
|
|
|
5,814
|
|
|
Net income
|
$
|
14,845
|
|
|
12,972
|
|
|
12,482
|
|
Condensed Statements of Cash Flows
|
|
|
|
|
|
||||
Year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||||
Net income
|
$
|
14,845
|
|
|
12,972
|
|
|
12,482
|
|
Adjustments for non-cash items -
|
|
|
|
|
|
|
|
|
|
Increase in undistributed income of subsidiaries
|
(5,820
|
)
|
|
(7,032
|
)
|
|
(5,814
|
)
|
|
Other, net
|
(383
|
)
|
|
84
|
|
|
126
|
|
|
Net cash flows provided by operating activities
|
8,642
|
|
|
6,024
|
|
|
6,794
|
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of equity securities
|
(90
|
)
|
|
(54
|
)
|
|
(177
|
)
|
|
Proceeds from sales of equity securities
|
107
|
|
|
93
|
|
|
228
|
|
|
Investments in subsidiaries
|
—
|
|
|
(250
|
)
|
|
—
|
|
|
Cash paid for business acquisition, net of cash received
|
(268
|
)
|
|
—
|
|
|
—
|
|
|
Net cash flows provided by (used in) investing activities
|
(251
|
)
|
|
(211
|
)
|
|
51
|
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
416
|
|
|
360
|
|
|
379
|
|
|
Payments to repurchase common stock
|
(348
|
)
|
|
—
|
|
|
—
|
|
|
Repurchase of stock warrants
|
—
|
|
|
—
|
|
|
(1,545
|
)
|
|
Cash dividends paid on common stock
|
(8,124
|
)
|
|
(6,407
|
)
|
|
(6,375
|
)
|
|
Other
|
72
|
|
|
51
|
|
|
653
|
|
|
Net cash flows used in financing activities
|
(7,984
|
)
|
|
(5,996
|
)
|
|
(6,888
|
)
|
|
Net change in cash
|
407
|
|
|
(183
|
)
|
|
(43
|
)
|
|
Cash at beginning of year
|
308
|
|
|
491
|
|
|
534
|
|
|
Cash at end of year
|
$
|
715
|
|
|
308
|
|
|
491
|
|
(a)
Exhibit No
.
|
|
|
Exhibit Description
|
2.1
|
|
|
|
2.2
|
|
|
|
2.3
|
|
|
|
2.4
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.5
|
|
|
|
10.7
|
|
|
|
14.1
|
|
|
(a)
Exhibit No
.
|
|
|
Exhibit Description
|
21
|
|
|
|
23
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
101
|
|
|
The following financial information from LCNB Corp.’s Annual Report on Form 10-K for the year ended December 31, 2018 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
|
|
|
March 6, 2019
|
|
/s/ Steve P. Foster
|
|
/s/ William G. Huddle
|
|
Steve P. Foster, Chief Executive Officer &
|
|
William G. Huddle, Director
|
|
Director (Principal Executive Officer)
|
|
March 6, 2019
|
|
March 6, 2019
|
|
|
|
|
|
|
|
|
|
/s/ Michael J Johrendt
|
|
/s/ Robert C. Haines II
|
|
Michael J. Johrendt, Director
|
|
Robert C. Haines II, Executive Vice President
|
|
March 6, 2019
|
|
& Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
March 6, 2019
|
|
/s/ William H. Kaufman
|
|
|
|
William H. Kaufman, Director
|
|
|
|
March 6, 2019
|
|
/s/ Spencer S. Cropper
|
|
|
|
Spencer S. Cropper
|
|
|
|
Chairman of the Board of Directors
|
|
/s/ John H. Kochensparger III
|
|
March 6, 2019
|
|
John H. Kochensparger III, Director
|
|
|
|
March 6, 2019
|
|
|
|
|
|
/s/ Eric J. Meilstrup
|
|
|
|
Eric J. Meilstrup, President & Director
|
|
/s/ Anne E. Krehbiel
|
|
March 6, 2019
|
|
Anne E. Krehbiel, Director
|
|
|
|
March 6, 2019
|
|
|
|
|
|
/s/ Mary E. Bradford
|
|
|
|
Mary E Bradford, Director
|
|
/s/ Valerie S. Krueckeberg
|
|
March 6, 2019
|
|
Valerie S. Krueckeberg, Director
|
|
|
|
March 6, 2019
|
|
|
|
|
|
|
|
|
|
Stephen P. Wilson, Director
|
|
|
|
March 6, 2019
|
|
|
|
/s/ BKD, LLP
|
|
BKD,
LLP
|
|
|
|
Cincinnati, Ohio
|
|
March 6, 2019
|
|
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:
|
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/ Steve P. Foster
|
|
Steve P. Foster
|
|
Chief Executive Officer
|
|
March 6, 2019
|
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:
|
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
|
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Executive Vice President &
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Chief Financial Officer
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March 6, 2019
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Steve P. Foster
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/s/ Robert C. Haines II
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Steve P. Foster
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Robert C. Haines II
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Chief Executive Officer
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Executive Vice President and
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Chief Financial Officer
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