|
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|
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☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Ohio
|
|
31-1626393
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(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
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Title of Each Class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, No Par Value
|
LCNB
|
NASDAQ Capital Market
|
☐ Large accelerated filer
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☒ Accelerated filer
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☐ Non-accelerated filer
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☐ Smaller reporting company
|
|
☐ Emerging growth company
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PART I
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Item 1. Business
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Item 1A. Risk Factors
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Item 1B. Unresolved Staff Comments
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Item 2. Properties
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Item 3. Legal Proceedings
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Item 4. Mine Safety Disclosures
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PART II
|
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Item 6. Selected Financial Data
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Item 9A. Controls and Procedures
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Item 9B. Other Information
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PART III
|
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Item 11. Executive Compensation
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|
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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 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.
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changes in general economic conditions and increased competition could adversely affect LCNB’s operating results;
|
7.
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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.
|
United States trade relations with foreign countries could negatively impact the financial condition of LCNB's customers, which could adversely affect LCNB 's operating results and financial condition;
|
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;
|
12.
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adverse weather events and natural disasters and global and/or national epidemics; and
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13.
|
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,
|
•
|
an Operations Center in Warren County, Ohio,
|
•
|
and 38 ATMs.
|
•
|
creation of a new Financial Stability Oversight Council to identify systemic risks in the financial system and gives federal regulators new authority to take control of and liquidate financial firms;
|
•
|
elimination of the federal statutory prohibition against the payment of interest on business checking accounts;
|
•
|
prohibition on state-chartered banks engaging in derivatives transactions unless the loans to one borrower of the state in which the bank is chartered takes into consideration credit exposure to derivative transactions. For this purpose, derivative transactions include any contract, agreement, swap, warrant, note or option that is based in whole or in part on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodity securities, currencies, interest or other rates, indices, or other assets;
|
•
|
requirement that the amount of any interchange fee charged by a debit card issuer with respect to a debit card transaction must be reasonable and proportional to the cost incurred by the issuer. On June 29, 2011, the Federal Reserve Board set the interchange rate cap at $0.21 per transaction and 5 basis points multiplied by the value of the transaction. While the restrictions on interchange fees do not apply to banks that, together with their affiliates, have assets of less than $10 billion, the rule could affect the competitiveness of debit cards issued by smaller banks; and
|
•
|
restrictions under the Volcker Rule of the Company’s ability to engage in proprietary trading and to invest in, sponsor and engage in certain types of transactions with certain private funds. The Company had until July 15, 2015 to fully conform to the Volcker Rule's restrictions.
|
•
|
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 consolidated assets between eight and ten percent will be deemed to be in compliance with risk-based capital and leverage requirements.
|
•
|
Changing how federal financial institution regulators classify certain municipal securities assets under the liquidity coverage ratio rule;
|
•
|
Exempting certain reciprocal deposits from treatment as brokered deposits under the FDIC's brokered deposits rule;
|
•
|
Exempting banks with less than $10 billion in total consolidated assets from certain provisions under the Volcker Rule; and
|
•
|
Authorizing new banking procedures to better facilitate online transactions.
|
|
At December 31,
|
||||||||
|
2019
|
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
||||
U.S. Treasury notes
|
$
|
2,309
|
|
|
2,235
|
|
|
2,259
|
|
U.S. Agency notes
|
48,984
|
|
|
78,340
|
|
|
83,261
|
|
|
U.S. Agency mortgage-backed securities
|
84,406
|
|
|
55,610
|
|
|
67,153
|
|
|
Municipal securities
|
42,301
|
|
|
102,236
|
|
|
122,540
|
|
|
Total securities available-for-sale
|
178,000
|
|
|
238,421
|
|
|
275,213
|
|
|
|
|
|
|
|
|
||||
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
Municipal securities
|
27,525
|
|
|
29,721
|
|
|
32,571
|
|
|
|
|
|
|
|
|
||||
Equity securities with a readily determinable fair value:
|
|
|
|
|
|
||||
Mutual funds
|
1,345
|
|
|
1,559
|
|
|
1,542
|
|
|
Trust preferred securities
|
—
|
|
|
—
|
|
|
50
|
|
|
Equity securities
|
967
|
|
|
519
|
|
|
568
|
|
|
Equity securities without a readily determinable fair value:
|
|
|
|
|
|
||||
Mutual funds
|
2,000
|
|
|
2,000
|
|
|
1,000
|
|
|
Equity securities
|
99
|
|
|
99
|
|
|
99
|
|
|
Federal Reserve Bank stock
|
4,652
|
|
|
4,653
|
|
|
2,732
|
|
|
Federal Home Loan Bank stock
|
5,203
|
|
|
4,845
|
|
|
3,638
|
|
|
Total securities
|
$
|
219,791
|
|
|
281,817
|
|
|
317,413
|
|
|
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
|
2,273
|
|
|
2,309
|
|
|
2.07
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Five to ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total U.S. Treasury notes
|
2,273
|
|
|
2,309
|
|
|
2.07
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Agency notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Within one year
|
4,999
|
|
|
4,996
|
|
|
1.52
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
One to five years
|
35,468
|
|
|
35,577
|
|
|
1.99
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Five to ten years
|
8,278
|
|
|
8,411
|
|
|
2.39
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total U.S. Agency notes
|
48,745
|
|
|
48,984
|
|
|
2.01
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal securities (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Within one year
|
6,466
|
|
|
6,477
|
|
|
2.38
|
%
|
|
2,435
|
|
|
2,438
|
|
|
3.82
|
%
|
||
One to five years
|
17,075
|
|
|
17,255
|
|
|
3.02
|
%
|
|
7,404
|
|
|
7,432
|
|
|
2.77
|
%
|
||
Five to ten years
|
18,379
|
|
|
18,569
|
|
|
2.69
|
%
|
|
1,980
|
|
|
2,007
|
|
|
5.63
|
%
|
||
After ten years
|
—
|
|
|
—
|
|
|
—
|
%
|
|
15,706
|
|
|
16,011
|
|
|
5.75
|
%
|
||
Total Municipal securities
|
41,920
|
|
|
42,301
|
|
|
2.78
|
%
|
|
27,525
|
|
|
27,888
|
|
|
4.77
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Agency mortgage-backed securities
|
83,977
|
|
|
84,406
|
|
|
2.28
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Totals
|
$
|
176,915
|
|
|
178,000
|
|
|
2.32
|
%
|
|
27,525
|
|
|
27,888
|
|
|
4.77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(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,
|
|||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||||
Commercial and industrial
|
$
|
78,306
|
|
|
6.3
|
%
|
|
$
|
77,740
|
|
|
6.5
|
%
|
|
$
|
36,057
|
|
|
4.2
|
%
|
|
$
|
41,878
|
|
|
5.1
|
%
|
|
$
|
45,275
|
|
|
5.9
|
%
|
Commercial, secured by real estate
|
804,953
|
|
|
64.7
|
%
|
|
740,647
|
|
|
61.8
|
%
|
|
527,947
|
|
|
62.2
|
%
|
|
477,275
|
|
|
58.2
|
%
|
|
419,633
|
|
|
54.5
|
%
|
|||||
Residential real estate
|
322,533
|
|
|
26.0
|
%
|
|
349,127
|
|
|
29.1
|
%
|
|
251,582
|
|
|
29.6
|
%
|
|
265,788
|
|
|
32.5
|
%
|
|
273,139
|
|
|
35.4
|
%
|
|||||
Consumer
|
25,232
|
|
|
2.0
|
%
|
|
17,283
|
|
|
1.5
|
%
|
|
17,450
|
|
|
2.1
|
%
|
|
19,173
|
|
|
2.3
|
%
|
|
18,510
|
|
|
2.4
|
%
|
|||||
Agricultural
|
11,509
|
|
|
0.9
|
%
|
|
13,297
|
|
|
1.1
|
%
|
|
15,194
|
|
|
1.8
|
%
|
|
14,802
|
|
|
1.8
|
%
|
|
13,479
|
|
|
1.7
|
%
|
|||||
Other loans, including deposit overdrafts
|
1,193
|
|
|
0.1
|
%
|
|
450
|
|
|
—
|
%
|
|
539
|
|
|
0.1
|
%
|
|
633
|
|
|
0.1
|
%
|
|
665
|
|
|
0.1
|
%
|
|||||
|
1,243,726
|
|
|
100.0
|
%
|
|
1,198,544
|
|
|
100.0
|
%
|
|
848,769
|
|
|
100.0
|
%
|
|
819,549
|
|
|
100.0
|
%
|
|
770,701
|
|
|
100.0
|
%
|
|||||
Deferred origination costs (fees), net
|
(275
|
)
|
|
|
|
|
79
|
|
|
|
|
|
291
|
|
|
|
|
|
254
|
|
|
|
|
|
237
|
|
|
|
|
|||||
Total loans
|
1,243,451
|
|
|
|
|
|
1,198,623
|
|
|
|
|
|
849,060
|
|
|
|
|
|
819,803
|
|
|
|
|
|
770,938
|
|
|
|
|
|||||
Less allowance for loan losses
|
4,045
|
|
|
|
|
|
4,046
|
|
|
|
|
|
3,403
|
|
|
|
|
|
3,575
|
|
|
|
|
|
3,129
|
|
|
|
|
|||||
Loans, net
|
$
|
1,239,406
|
|
|
|
|
|
$
|
1,194,577
|
|
|
|
|
|
$
|
845,657
|
|
|
|
|
|
$
|
816,228
|
|
|
|
|
|
$
|
767,809
|
|
|
|
|
|
(In thousands)
|
||
Maturing in one year or less
|
$
|
54,161
|
|
Maturing after one year, but within five years
|
118,689
|
|
|
Maturing beyond five years
|
721,918
|
|
|
Total commercial and agricultural loans
|
$
|
894,768
|
|
|
|
|
|
Loans maturing beyond one year:
|
|
|
|
Fixed rate
|
$
|
329,672
|
|
Variable rate
|
510,935
|
|
|
Total
|
$
|
840,607
|
|
|
At December 31,
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Dollars in thousands)
|
||||||||||||||
Non-accrual loans
|
$
|
3,210
|
|
|
2,951
|
|
|
2,965
|
|
|
5,725
|
|
|
1,723
|
|
Past-due 90 days or more and still accruing
|
—
|
|
|
149
|
|
|
—
|
|
|
23
|
|
|
559
|
|
|
Accruing restructured loans
|
6,609
|
|
|
10,516
|
|
|
10,469
|
|
|
11,731
|
|
|
13,723
|
|
|
Total
|
$
|
9,819
|
|
|
13,616
|
|
|
13,434
|
|
|
17,479
|
|
|
16,005
|
|
Percent to total loans
|
0.79
|
%
|
|
1.14
|
%
|
|
1.58
|
%
|
|
2.13
|
%
|
|
2.08
|
%
|
|
At December 31,
|
|||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||
|
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
|
$
|
456
|
|
|
6.3
|
%
|
|
$
|
400
|
|
|
6.5
|
%
|
|
$
|
378
|
|
|
4.2
|
%
|
|
$
|
350
|
|
|
5.1
|
%
|
|
$
|
244
|
|
|
5.9
|
%
|
Commercial, secured by real estate
|
2,924
|
|
|
64.7
|
%
|
|
2,745
|
|
|
61.8
|
%
|
|
2,178
|
|
|
62.2
|
%
|
|
2,179
|
|
|
58.2
|
%
|
|
1,908
|
|
|
54.5
|
%
|
|||||
Residential real estate
|
528
|
|
|
26.0
|
%
|
|
767
|
|
|
29.1
|
%
|
|
717
|
|
|
29.6
|
%
|
|
885
|
|
|
32.5
|
%
|
|
854
|
|
|
35.4
|
%
|
|||||
Consumer
|
99
|
|
|
2.0
|
%
|
|
87
|
|
|
1.5
|
%
|
|
76
|
|
|
2.1
|
%
|
|
96
|
|
|
2.3
|
%
|
|
54
|
|
|
2.4
|
%
|
|||||
Agricultural
|
34
|
|
|
0.9
|
%
|
|
46
|
|
|
1.1
|
%
|
|
53
|
|
|
1.8
|
%
|
|
60
|
|
|
1.8
|
%
|
|
66
|
|
|
1.7
|
%
|
|||||
Other loans, including deposit overdrafts
|
4
|
|
|
0.1
|
%
|
|
1
|
|
|
—
|
%
|
|
1
|
|
|
0.1
|
%
|
|
5
|
|
|
0.1
|
%
|
|
3
|
|
|
0.1
|
%
|
|||||
Total
|
$
|
4,045
|
|
|
100.0
|
%
|
|
$
|
4,046
|
|
|
100.0
|
%
|
|
$
|
3,403
|
|
|
100.0
|
%
|
|
$
|
3,575
|
|
|
100.0
|
%
|
|
$
|
3,129
|
|
|
100.0
|
%
|
|
(In thousands)
|
||
Maturity within 3 months
|
$
|
25,164
|
|
After 3 but within 6 months
|
29,718
|
|
|
After 6 but within 12 months
|
49,706
|
|
|
After 12 months
|
53,003
|
|
|
|
$
|
157,591
|
|
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 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
November 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
December 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
For the Years Ended December 31,
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Dollars in thousands, except per share data)
|
||||||||||||||
Income Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
$
|
65,194
|
|
|
54,594
|
|
|
44,463
|
|
|
43,750
|
|
|
42,659
|
|
Interest expense
|
10,788
|
|
|
6,425
|
|
|
3,599
|
|
|
3,504
|
|
|
3,328
|
|
|
Net interest income
|
54,406
|
|
|
48,169
|
|
|
40,864
|
|
|
40,246
|
|
|
39,331
|
|
|
Provision for loan losses
|
207
|
|
|
923
|
|
|
215
|
|
|
913
|
|
|
1,366
|
|
|
Net interest income after provision for loan losses
|
54,199
|
|
|
47,246
|
|
|
40,649
|
|
|
39,333
|
|
|
37,965
|
|
|
Non-interest income
|
12,348
|
|
|
11,050
|
|
|
10,458
|
|
|
10,853
|
|
|
10,123
|
|
|
Non-interest expenses
|
43,522
|
|
|
40,502
|
|
|
33,863
|
|
|
33,261
|
|
|
32,392
|
|
|
Income before income taxes
|
23,025
|
|
|
17,794
|
|
|
17,244
|
|
|
16,925
|
|
|
15,696
|
|
|
Provision for income taxes
|
4,113
|
|
|
2,949
|
|
|
4,272
|
|
|
4,443
|
|
|
4,222
|
|
|
Net income
|
$
|
18,912
|
|
|
14,845
|
|
|
12,972
|
|
|
12,482
|
|
|
11,474
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends per common share
|
$
|
0.69
|
|
|
0.65
|
|
|
0.64
|
|
|
0.64
|
|
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.44
|
|
|
1.24
|
|
|
1.30
|
|
|
1.26
|
|
|
1.18
|
|
|
Diluted
|
1.44
|
|
|
1.24
|
|
|
1.29
|
|
|
1.25
|
|
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
$
|
219,791
|
|
|
282,813
|
|
|
317,413
|
|
|
368,032
|
|
|
406,981
|
|
Loans, net
|
1,239,406
|
|
|
1,194,577
|
|
|
845,657
|
|
|
816,228
|
|
|
767,809
|
|
|
Total assets
|
1,639,308
|
|
|
1,636,927
|
|
|
1,295,638
|
|
|
1,306,799
|
|
|
1,280,531
|
|
|
Total deposits
|
1,348,280
|
|
|
1,300,919
|
|
|
1,085,821
|
|
|
1,110,905
|
|
|
1,087,160
|
|
|
Short-term borrowings
|
—
|
|
|
56,230
|
|
|
47,000
|
|
|
42,040
|
|
|
37,387
|
|
|
Long-term debt
|
40,994
|
|
|
47,032
|
|
|
303
|
|
|
598
|
|
|
5,947
|
|
|
Total shareholders' equity
|
228,048
|
|
|
218,985
|
|
|
150,271
|
|
|
142,944
|
|
|
140,108
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selected Financial Ratios and Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
1.15
|
%
|
|
1.00
|
%
|
|
0.99
|
%
|
|
0.96
|
%
|
|
0.94
|
%
|
|
Return on average equity
|
8.42
|
%
|
|
7.90
|
%
|
|
8.74
|
%
|
|
8.60
|
%
|
|
8.43
|
%
|
|
Equity-to-assets ratio
|
13.91
|
%
|
|
13.38
|
%
|
|
11.60
|
%
|
|
10.94
|
%
|
|
10.94
|
%
|
|
Dividend payout ratio
|
47.92
|
%
|
|
52.42
|
%
|
|
49.23
|
%
|
|
50.79
|
%
|
|
54.24
|
%
|
|
Net interest margin, fully taxable equivalent
|
3.71
|
%
|
|
3.63
|
%
|
|
3.58
|
%
|
|
3.51
|
%
|
|
3.64
|
%
|
•
|
CFB merged with and into LCNB Corp. on May 31, 2018.
|
•
|
Expenses related to the merger with CFB totaled $2,123,000 during 2018.
|
•
|
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,
|
||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
|
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)
|
$
|
1,221,375
|
|
|
59,009
|
|
|
4.83
|
%
|
|
$
|
1,038,159
|
|
|
47,489
|
|
|
4.57
|
%
|
|
$
|
822,452
|
|
|
36,571
|
|
|
4.45
|
%
|
Interest-bearing demand deposits
|
8,389
|
|
|
241
|
|
|
2.87
|
%
|
|
5,164
|
|
|
136
|
|
|
2.63
|
%
|
|
7,972
|
|
|
88
|
|
|
1.10
|
%
|
|||
Interest-bearing time deposits
|
488
|
|
|
11
|
|
|
2.25
|
%
|
|
4,008
|
|
|
58
|
|
|
1.45
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Federal Reserve Bank stock
|
4,652
|
|
|
279
|
|
|
6.00
|
%
|
|
3,268
|
|
|
196
|
|
|
6.00
|
%
|
|
2,732
|
|
|
164
|
|
|
6.00
|
%
|
|||
Federal Home Loan Bank stock
|
5,108
|
|
|
249
|
|
|
4.87
|
%
|
|
4,346
|
|
|
259
|
|
|
5.96
|
%
|
|
3,638
|
|
|
182
|
|
|
5.00
|
%
|
|||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Equity securities
|
4,310
|
|
|
127
|
|
|
2.95
|
%
|
|
3,782
|
|
|
104
|
|
|
2.75
|
%
|
|
3,249
|
|
|
89
|
|
|
2.74
|
%
|
|||
Debt securities, taxable
|
159,377
|
|
|
3,601
|
|
|
2.26
|
%
|
|
165,300
|
|
|
3,666
|
|
|
2.22
|
%
|
|
205,669
|
|
|
4,239
|
|
|
2.06
|
%
|
|||
Debt securities, non-taxable (2)
|
73,634
|
|
|
2,123
|
|
|
2.88
|
%
|
|
123,135
|
|
|
3,400
|
|
|
2.76
|
%
|
|
143,394
|
|
|
4,815
|
|
|
3.36
|
%
|
|||
Total earning assets
|
1,477,333
|
|
|
65,640
|
|
|
4.44
|
%
|
|
1,347,162
|
|
|
55,308
|
|
|
4.11
|
%
|
|
1,189,106
|
|
|
46,148
|
|
|
3.88
|
%
|
|||
Non-earning assets
|
169,314
|
|
|
|
|
|
|
|
|
145,601
|
|
|
|
|
|
|
|
|
123,800
|
|
|
|
|
|
|
|
|||
Allowance for loan losses
|
(4,056
|
)
|
|
|
|
|
|
|
|
(3,822
|
)
|
|
|
|
|
|
|
|
(3,405
|
)
|
|
|
|
|
|
|
|||
Total assets
|
$
|
1,642,591
|
|
|
|
|
|
|
|
|
$
|
1,488,941
|
|
|
|
|
|
|
|
|
$
|
1,309,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Savings deposits
|
$
|
687,458
|
|
|
2,446
|
|
|
0.36
|
%
|
|
$
|
689,322
|
|
|
1,332
|
|
|
0.19
|
%
|
|
$
|
645,471
|
|
|
594
|
|
|
0.09
|
%
|
IRA and time certificates
|
327,321
|
|
|
7,080
|
|
|
2.16
|
%
|
|
253,524
|
|
|
4,421
|
|
|
1.74
|
%
|
|
205,540
|
|
|
2,784
|
|
|
1.35
|
%
|
|||
Short-term borrowings
|
6,064
|
|
|
227
|
|
|
3.74
|
%
|
|
13,967
|
|
|
311
|
|
|
2.23
|
%
|
|
23,976
|
|
|
209
|
|
|
0.87
|
%
|
|||
Long-term debt
|
42,733
|
|
|
1,035
|
|
|
2.42
|
%
|
|
16,789
|
|
|
361
|
|
|
2.15
|
%
|
|
421
|
|
|
12
|
|
|
2.85
|
%
|
|||
Total interest-bearing liabilities
|
1,063,576
|
|
|
10,788
|
|
|
1.01
|
%
|
|
973,602
|
|
|
6,425
|
|
|
0.66
|
%
|
|
875,408
|
|
|
3,599
|
|
|
0.41
|
%
|
|||
Demand deposits
|
336,257
|
|
|
|
|
|
|
|
|
315,229
|
|
|
|
|
|
|
|
|
274,855
|
|
|
|
|
|
|
|
|||
Other liabilities
|
18,119
|
|
|
|
|
|
|
|
|
12,195
|
|
|
|
|
|
|
|
|
10,795
|
|
|
|
|
|
|
|
|||
Capital
|
224,639
|
|
|
|
|
|
|
|
|
187,915
|
|
|
|
|
|
|
|
|
148,443
|
|
|
|
|
|
|
|
|||
Total liabilities and capital
|
$
|
1,642,591
|
|
|
|
|
|
|
|
|
$
|
1,488,941
|
|
|
|
|
|
|
|
|
$
|
1,309,501
|
|
|
|
|
|
|
|
Net interest rate spread (3)
|
|
|
|
|
|
|
3.43
|
%
|
|
|
|
|
|
|
|
3.45
|
%
|
|
|
|
|
|
|
|
3.47
|
%
|
|||
Net interest income and net interest margin on a tax equivalent basis (4)
|
|
|
|
54,852
|
|
|
3.71
|
%
|
|
|
|
|
48,883
|
|
|
3.63
|
%
|
|
|
|
|
42,549
|
|
|
3.58
|
%
|
|||
Ratio of interest-earning assets to interest-bearing liabilities
|
138.90
|
%
|
|
|
|
|
|
|
|
138.37
|
%
|
|
|
|
|
|
|
|
135.83
|
%
|
|
|
|
|
|
|
(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 2019 and 2018 and 34% for 2017.
|
(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,
|
|||||||||||||||||
|
2019 vs. 2018
|
|
2018 vs. 2017
|
|||||||||||||||
|
Increase (decrease) due to
|
|
Increase (decrease) due to
|
|||||||||||||||
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
|||||||
|
(In thousands)
|
|||||||||||||||||
Interest income attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans (1)
|
$
|
8,738
|
|
|
2,782
|
|
|
11,520
|
|
|
9,840
|
|
|
1,078
|
|
|
10,918
|
|
Interest-bearing demand deposits
|
92
|
|
|
13
|
|
|
105
|
|
|
(40
|
)
|
|
88
|
|
|
48
|
|
|
Interest-bearing time deposits
|
(68
|
)
|
|
21
|
|
|
(47
|
)
|
|
58
|
|
|
—
|
|
|
58
|
|
|
Federal Reserve Bank stock
|
83
|
|
|
—
|
|
|
83
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|
Federal Home Loan Bank stock
|
41
|
|
|
(51
|
)
|
|
(10
|
)
|
|
39
|
|
|
38
|
|
|
77
|
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
15
|
|
|
8
|
|
|
23
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
Debt securities, taxable
|
(133
|
)
|
|
68
|
|
|
(65
|
)
|
|
(878
|
)
|
|
305
|
|
|
(573
|
)
|
|
Debt securities, non-taxable (2)
|
(1,421
|
)
|
|
144
|
|
|
(1,277
|
)
|
|
(627
|
)
|
|
(788
|
)
|
|
(1,415
|
)
|
|
Total interest income
|
7,347
|
|
|
2,985
|
|
|
10,332
|
|
|
8,439
|
|
|
721
|
|
|
9,160
|
|
|
Interest expense attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits
|
(4
|
)
|
|
1,118
|
|
|
1,114
|
|
|
43
|
|
|
695
|
|
|
738
|
|
|
IRA and time certificates
|
1,456
|
|
|
1,203
|
|
|
2,659
|
|
|
734
|
|
|
903
|
|
|
1,637
|
|
|
Short-term borrowings
|
(230
|
)
|
|
146
|
|
|
(84
|
)
|
|
(116
|
)
|
|
218
|
|
|
102
|
|
|
Long-term debt
|
623
|
|
|
51
|
|
|
674
|
|
|
353
|
|
|
(4
|
)
|
|
349
|
|
|
Total interest expense
|
1,845
|
|
|
2,518
|
|
|
4,363
|
|
|
1,014
|
|
|
1,812
|
|
|
2,826
|
|
|
Net interest income
|
$
|
5,502
|
|
|
467
|
|
|
5,969
|
|
|
7,425
|
|
|
(1,091
|
)
|
|
6,334
|
|
(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 2019 and 2018 and 34% for 2017.
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Dollars in thousands)
|
||||||||||||||
Balance – Beginning of year
|
$
|
4,046
|
|
|
3,403
|
|
|
3,575
|
|
|
3,129
|
|
|
3,121
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans charged off:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
47
|
|
|
—
|
|
|
—
|
|
|
234
|
|
|
100
|
|
|
Commercial, secured by real estate
|
143
|
|
|
145
|
|
|
462
|
|
|
185
|
|
|
1,133
|
|
|
Residential real estate
|
272
|
|
|
234
|
|
|
225
|
|
|
127
|
|
|
304
|
|
|
Consumer
|
24
|
|
|
135
|
|
|
90
|
|
|
85
|
|
|
52
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
Other loans, including deposit overdrafts
|
181
|
|
|
179
|
|
|
138
|
|
|
119
|
|
|
74
|
|
|
Total loans charged off
|
667
|
|
|
693
|
|
|
915
|
|
|
750
|
|
|
1,730
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
—
|
|
|
1
|
|
|
99
|
|
|
26
|
|
|
7
|
|
|
Commercial, secured by real estate
|
56
|
|
|
239
|
|
|
113
|
|
|
98
|
|
|
96
|
|
|
Residential real estate
|
297
|
|
|
71
|
|
|
140
|
|
|
52
|
|
|
107
|
|
|
Consumer
|
32
|
|
|
13
|
|
|
114
|
|
|
53
|
|
|
60
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
Other loans, including deposit overdrafts
|
74
|
|
|
89
|
|
|
62
|
|
|
54
|
|
|
35
|
|
|
Total recoveries
|
459
|
|
|
413
|
|
|
528
|
|
|
283
|
|
|
372
|
|
|
Net charge offs
|
208
|
|
|
280
|
|
|
387
|
|
|
467
|
|
|
1,358
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Provision charged to operations
|
207
|
|
|
923
|
|
|
215
|
|
|
913
|
|
|
1,366
|
|
|
Balance - End of year
|
$
|
4,045
|
|
|
4,046
|
|
|
3,403
|
|
|
3,575
|
|
|
3,129
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of net charge-offs during the period to average loans outstanding
|
0.02
|
%
|
|
0.03
|
%
|
|
0.05
|
%
|
|
0.06
|
%
|
|
0.18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of allowance for loan losses to total loans at year-end
|
0.33
|
%
|
|
0.34
|
%
|
|
0.40
|
%
|
|
0.44
|
%
|
|
0.41
|
%
|
|
|
|
|
|
|
|
Increase (Decrease)
|
||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||
|
(In thousands)
|
||||||||||||||
Fiduciary income
|
$
|
4,354
|
|
|
3,958
|
|
|
3,473
|
|
|
396
|
|
|
485
|
|
Service charges and fees on deposit accounts
|
5,875
|
|
|
5,590
|
|
|
5,236
|
|
|
285
|
|
|
354
|
|
|
Net gains (losses) on sales of securities
|
(41
|
)
|
|
(8
|
)
|
|
233
|
|
|
(33
|
)
|
|
(241
|
)
|
|
Bank owned life insurance income
|
943
|
|
|
738
|
|
|
867
|
|
|
205
|
|
|
(129
|
)
|
|
Net gains from sales of loans
|
328
|
|
|
223
|
|
|
166
|
|
|
105
|
|
|
57
|
|
|
Other operating income
|
889
|
|
|
549
|
|
|
483
|
|
|
340
|
|
|
66
|
|
|
Total non-interest income
|
12,348
|
|
|
11,050
|
|
|
10,458
|
|
|
1,298
|
|
|
592
|
|
•
|
Fiduciary income increased during 2019 and 2018 due to increases in the fair value of trust and brokerage assets managed.
|
•
|
Service charges and fees increased during 2019 due to fee income recognized on the Insured Cash Sweep ("ICS") deposit program, fees received from debit card usage, and incentive income received on co-branded Mastercards. These increases were partially offset by decreases in service charges on deposit accounts, ATM surcharge fees, and overdraft fees. The increase during 2018 was primarily due to fees earned from the ICS deposit program 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.
|
•
|
Net gains (losses) on sales of securities were less during 2019 and 2018 as compared to 2017 primarily due to market pricing at the times of the sales. Dollar volume of sales for 2019, 2018, and 2017 were, respectively, $84.6 million, $8.6 million, and $43.0 million.
|
•
|
Bank owned life insurance income was greater during 2019 primarily due to $12.0 million of new policies purchased at the beginning of the third quarter 2019. Income decreased in 2018 as compared to 2017 primarily due to the absence of mortality benefits recognized during 2017. No mortality benefits were received in 2019 or 2018.
|
•
|
Other operating income was higher in 2019 primarily due to an increase in the fair value of equity security investments.
|
|
|
|
|
|
|
|
Increase (Decrease)
|
||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||
|
(In thousands)
|
||||||||||||||
Salaries and employee benefits
|
$
|
25,320
|
|
|
21,279
|
|
|
18,585
|
|
|
4,041
|
|
|
2,694
|
|
Equipment expenses
|
1,209
|
|
|
1,138
|
|
|
1,172
|
|
|
71
|
|
|
(34
|
)
|
|
Occupancy expense, net
|
2,961
|
|
|
2,861
|
|
|
2,613
|
|
|
100
|
|
|
248
|
|
|
State financial institutions tax
|
1,669
|
|
|
1,197
|
|
|
1,137
|
|
|
472
|
|
|
60
|
|
|
Marketing
|
1,319
|
|
|
1,119
|
|
|
873
|
|
|
200
|
|
|
246
|
|
|
Amortization of intangibles
|
1,043
|
|
|
922
|
|
|
751
|
|
|
121
|
|
|
171
|
|
|
FDIC premiums
|
225
|
|
|
419
|
|
|
423
|
|
|
(194
|
)
|
|
(4
|
)
|
|
ATM expense
|
580
|
|
|
580
|
|
|
572
|
|
|
—
|
|
|
8
|
|
|
Computer maintenance and supplies
|
1,094
|
|
|
990
|
|
|
882
|
|
|
104
|
|
|
108
|
|
|
Telephone expense
|
707
|
|
|
649
|
|
|
735
|
|
|
58
|
|
|
(86
|
)
|
|
Contracted services
|
1,865
|
|
|
1,547
|
|
|
1,255
|
|
|
318
|
|
|
292
|
|
|
Other real estate owned
|
53
|
|
|
20
|
|
|
10
|
|
|
33
|
|
|
10
|
|
|
Merger-related expenses
|
114
|
|
|
2,123
|
|
|
118
|
|
|
(2,009
|
)
|
|
2,005
|
|
|
Other non-interest expense
|
5,363
|
|
|
5,658
|
|
|
4,737
|
|
|
(295
|
)
|
|
921
|
|
|
Total non-interest expense
|
43,522
|
|
|
40,502
|
|
|
33,863
|
|
|
3,020
|
|
|
6,639
|
|
•
|
Salaries and employee benefits were 19.0% greater in 2019 than in 2018 and 14.5% greater in 2018 than in 2017. The increases for both years were primarily due to salary and wage increases, incentive payment increases, and newly hired employees, including additional business development positions and CFB employees retained. An increase in health insurance costs also contributed to the increase. The number of full-time equivalent employees was 332 at December 31, 2019, 325 at December 31, 2018, and 310 at December 31, 2017.
|
•
|
Occupancy expense for 2019 increased primarily due to increased branch rental expense and increased charges for maintenance and repairs. 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.
|
•
|
State financial institutions tax expense increased in 2019 due to a larger capital base (Ohio financial institutions tax is based on capital, not income), largely due to stock issued to CFB stockholders during 2018 as merger consideration.
|
•
|
Marketing expense increased in 2019 and 2018 primarily due to promotion costs for new checking products introduced in 2018, increased marketing activities in the Columbus area, and expanded use of television, radio, and digital media.
|
•
|
FDIC premiums were lower in 2019 as compared to 2018 and 2017 due to small bank assessment credits received from the FDIC during 2019 because the Deposit Insurance Fund was above the mandated level of 1.35%.
|
•
|
Computer maintenance and supplies increased in 2019 and 2018 due to increased technology and software related expenditures designed to offer technological convenience to customers, to protect the integrity of LCNB's data systems and software, and to protect the confidentiality of customer information.
|
•
|
Contracted services increased in 2019 and 2018 due to additional fees paid for loan and deposit system upgrades and improvements and to general price increases on other contracted services.
|
•
|
Merger-related expenses for 2019, 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.
|
|
December 31, 2019
|
|
December 31, 2018
|
|
Difference $
|
|
Difference %
|
||||
ASSETS:
|
|
|
|
|
|
|
|
||||
Total cash and cash equivalents
|
20,765
|
|
|
20,040
|
|
|
725
|
|
|
3.62
|
%
|
Interest-bearing time deposits
|
—
|
|
|
996
|
|
|
(996
|
)
|
|
(100.00
|
)%
|
Investment securities:
|
|
|
|
|
|
|
|
||||
Equity securities with a readily determinable fair value, at fair value
|
2,312
|
|
|
2,078
|
|
|
234
|
|
|
11.26
|
%
|
Equity securities without a readily determinable fair value, at cost
|
2,099
|
|
|
2,099
|
|
|
—
|
|
|
—
|
%
|
Debt securities, available-for-sale, at fair value
|
178,000
|
|
|
238,421
|
|
|
(60,421
|
)
|
|
(25.34
|
)%
|
Debt securities, held-to-maturity, at cost
|
27,525
|
|
|
29,721
|
|
|
(2,196
|
)
|
|
(7.39
|
)%
|
Federal Reserve Bank stock, at cost
|
4,652
|
|
|
4,653
|
|
|
(1
|
)
|
|
(0.02
|
)%
|
Federal Home Loan Bank stock, at cost
|
5,203
|
|
|
4,845
|
|
|
358
|
|
|
7.39
|
%
|
Loans, net
|
1,239,406
|
|
|
1,194,577
|
|
|
44,829
|
|
|
3.75
|
%
|
Premises and equipment, net
|
34,787
|
|
|
32,627
|
|
|
2,160
|
|
|
6.62
|
%
|
Operating lease right-of-use assets
|
5,444
|
|
|
—
|
|
|
5,444
|
|
|
—
|
%
|
Goodwill
|
59,221
|
|
|
59,221
|
|
|
—
|
|
|
—
|
%
|
Core deposit and other intangibles
|
4,006
|
|
|
5,042
|
|
|
(1,036
|
)
|
|
(20.55
|
)%
|
Bank owned life insurance
|
41,667
|
|
|
28,723
|
|
|
12,944
|
|
|
45.06
|
%
|
Other assets
|
14,221
|
|
|
13,884
|
|
|
337
|
|
|
2.43
|
%
|
Total assets
|
1,639,308
|
|
|
1,636,927
|
|
|
2,381
|
|
|
0.15
|
%
|
|
|
|
|
|
|
|
|
||||
LIABILITIES:
|
|
|
|
|
|
|
|
||||
Deposits:
|
|
|
|
|
|
|
|
||||
Non-interest-bearing
|
354,391
|
|
|
322,571
|
|
|
31,820
|
|
|
9.86
|
%
|
Interest-bearing
|
993,889
|
|
|
978,348
|
|
|
15,541
|
|
|
1.59
|
%
|
Total deposits
|
1,348,280
|
|
|
1,300,919
|
|
|
47,361
|
|
|
3.64
|
%
|
Short-term borrowings
|
—
|
|
|
56,230
|
|
|
(56,230
|
)
|
|
(100.00
|
)%
|
Long-term debt
|
40,994
|
|
|
47,032
|
|
|
(6,038
|
)
|
|
(12.84
|
)%
|
Operating leases liability
|
5,446
|
|
|
—
|
|
|
5,446
|
|
|
—
|
%
|
Accrued interest and other liabilities
|
16,540
|
|
|
13,761
|
|
|
2,779
|
|
|
20.19
|
%
|
Total liabilities
|
1,411,260
|
|
|
1,417,942
|
|
|
(6,682
|
)
|
|
(0.47
|
)%
|
|
|
|
|
|
|
|
|
||||
TOTAL SHAREHOLDERS' EQUITY
|
228,048
|
|
|
218,985
|
|
|
9,063
|
|
|
4.14
|
%
|
Total liabilities and shareholders' equity
|
1,639,308
|
|
|
1,636,927
|
|
|
2,381
|
|
|
0.15
|
%
|
•
|
Interest-bearing time deposits were obtained through the merger with CFB. This line item represents certificates of deposit with individual balances of less than $250,000 invested in various financial institutions. Management decided not to renew matured certificates.
|
•
|
Debt securities, available-for-sale, decreased due to sales of securities with a total book value of $84.6 million and maturities and calls of securities totaling $17.2 million. These decreases were partially offset by the purchase of new securities totaling $47.3 million and by a net increase in fair values totaling $6.9 million. The net funds received were invested in the loan portfolio and used to help pay down short-term borrowings and long-term debt.
|
•
|
Federal Home Loan Bank stock increased due to the purchase of additional shares.
|
•
|
Net loans increased due to organic growth in the loan portfolio.
|
•
|
Premises and equipment, net increased primarily due to Main Office remodeling costs, partially offset by depreciation expense.
|
•
|
LCNB adopted ASU No. 2016-02, "Leases (Topic 842)" on January 1, 2019 and recorded operating lease right-of-use assets representing its right to use the underlying assets for the terms of the leases and an operating leases liability representing its liability to make lease payments. See Note 1 -Basis of Presentation - Accounting Changes and Note 8 - Leases for more information.
|
•
|
Core deposit and other intangibles decreased due to amortization of core deposit intangibles.
|
•
|
Bank owned life insurance increased due to the purchase of $12.0 million in new policies at the beginning of the third quarter 2019.
|
•
|
Total deposits increased partially due to a $28.8 million increase in public fund deposits by local government entities and partially due to organic growth. Public fund deposits can be relatively volatile due to seasonal tax collections and the financial needs of the local entities. Historically, these deposits tend to be at their lowest balances at year-ends. This increase was partially offset by a decline in ICS reciprocal accounts deposited with LCNB. The reciprocal deposits were allowed to decrease because management utilized other sources of liquidity, including the decrease in debt securities, available-for-sale.
|
•
|
The decrease in short-term borrowings was funded primarily by the increase in total deposits and the decrease in debt securities, available-for-sale.
|
•
|
Long-term debt decreased due to payoffs of matured debt. There were no new borrowings during 2019.
|
•
|
Total shareholders' equity increased primarily due to earnings retained during 2019 and to a $5.5 million increase in accumulated other comprehensive income (loss), net of taxes caused by market-driven increases in the fair value of LCNB's debt security investments. These increases were partially offset by common stock repurchased and dividends paid to shareholders.
|
|
|
|
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
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-term debt obligations
|
40,994
|
|
|
18,998
|
|
|
16,996
|
|
|
5,000
|
|
|
—
|
|
|
Operating lease obligations
|
11,683
|
|
|
458
|
|
|
654
|
|
|
472
|
|
|
10,099
|
|
|
Estimated pension plan contribution for 2019
|
205
|
|
|
205
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Funding commitments for affordable housing tax credit limited partnerships
|
4,596
|
|
|
1,396
|
|
|
2,197
|
|
|
418
|
|
|
585
|
|
|
Estimated capital expenditure obligations
|
1,820
|
|
|
1,820
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Certificates of deposit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$100,000 and over
|
157,591
|
|
|
104,588
|
|
|
36,917
|
|
|
15,819
|
|
|
267
|
|
|
Other time certificates
|
166,537
|
|
|
99,955
|
|
|
47,076
|
|
|
18,511
|
|
|
995
|
|
|
Total
|
$
|
383,426
|
|
|
227,420
|
|
|
103,840
|
|
|
40,220
|
|
|
11,946
|
|
|
|
|
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
|
$
|
55,865
|
|
|
55,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Unused lines of credit
|
219,677
|
|
|
68,621
|
|
|
102,795
|
|
|
20,849
|
|
|
27,412
|
|
|
Standby letters of credit
|
883
|
|
|
883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
276,425
|
|
|
125,369
|
|
|
102,795
|
|
|
20,849
|
|
|
27,412
|
|
Rate Shock Scenario in
Basis Points
|
|
Amount
(In thousands)
|
|
$ Change in
Net Interest
Income
|
|
% Change in
Net Interest
Income
|
||||
Up 400
|
|
$
|
60,688
|
|
|
1,947
|
|
|
3.31
|
%
|
Up 300
|
|
60,203
|
|
|
1,462
|
|
|
2.49
|
%
|
|
Up 200
|
|
59,709
|
|
|
968
|
|
|
1.65
|
%
|
|
Up 100
|
|
59,208
|
|
|
467
|
|
|
0.80
|
%
|
|
Base
|
|
58,741
|
|
|
—
|
|
|
—
|
%
|
|
Down 100
|
|
58,845
|
|
|
104
|
|
|
0.18
|
%
|
|
Down 200
|
|
59,028
|
|
|
287
|
|
|
0.49
|
%
|
Rate Shock Scenario in
Basis Points
|
|
Amount
(In thousands)
|
|
$ Change in
EVE
|
|
% Change in
EVE
|
||||
Up 400
|
|
$
|
246,911
|
|
|
5,169
|
|
|
2.14
|
%
|
Up 300
|
|
247,498
|
|
|
5,756
|
|
|
2.38
|
%
|
|
Up 200
|
|
246,705
|
|
|
4,963
|
|
|
2.05
|
%
|
|
Up 100
|
|
243,619
|
|
|
1,877
|
|
|
0.78
|
%
|
|
Base
|
|
241,742
|
|
|
—
|
|
|
—
|
%
|
|
Down 100
|
|
247,533
|
|
|
5,791
|
|
|
2.40
|
%
|
|
Down 200
|
|
264,576
|
|
|
22,834
|
|
|
9.45
|
%
|
/s/ Eric J. Meilstrup
|
|
/s/ Robert C. Haines II
|
|
Eric J. Meilstrup
|
|
Robert C. Haines II
|
|
President & Chief Executive Officer
|
|
Executive Vice President &
|
|
March 4, 2020
|
|
Chief Financial Officer
|
|
|
|
March 4, 2020
|
|
/s/ BKD, LLP
|
|
|
|
BKD, LLP
|
|
|
|
|
|
|
|
Cincinnati, Ohio
|
|
|
|
March 4, 2020
|
|
|
|
/s/ BKD, LLP
|
|
|
BKD, LLP
|
|
|
|
|
|
We have served as the Company’s auditor since 2014.
|
|
|
|
|
|
Cincinnati, Ohio
|
|
|
March 4, 2020
|
|
|
|
2019
|
|
2018
|
|||
ASSETS:
|
|
|
|
|||
Cash and due from banks
|
$
|
17,019
|
|
|
18,310
|
|
Interest-bearing demand deposits
|
3,746
|
|
|
1,730
|
|
|
Total cash and cash equivalents
|
20,765
|
|
|
20,040
|
|
|
|
|
|
|
|||
Interest-bearing time deposits
|
—
|
|
|
996
|
|
|
Investment securities:
|
|
|
|
|||
Equity securities with a readily determinable fair value, at fair value
|
2,312
|
|
|
2,078
|
|
|
Equity securities without a readily determinable fair value, at cost
|
2,099
|
|
|
2,099
|
|
|
Debt securities, available-for-sale, at fair value
|
178,000
|
|
|
238,421
|
|
|
Debt securities, held-to-maturity, at cost
|
27,525
|
|
|
29,721
|
|
|
Federal Reserve Bank stock, at cost
|
4,652
|
|
|
4,653
|
|
|
Federal Home Loan Bank stock, at cost
|
5,203
|
|
|
4,845
|
|
|
Loans, net
|
1,239,406
|
|
|
1,194,577
|
|
|
Premises and equipment, net
|
34,787
|
|
|
32,627
|
|
|
Operating lease right-of-use assets
|
5,444
|
|
|
—
|
|
|
Goodwill
|
59,221
|
|
|
59,221
|
|
|
Core deposit and other intangibles
|
4,006
|
|
|
5,042
|
|
|
Bank owned life insurance
|
41,667
|
|
|
28,723
|
|
|
Other assets
|
14,221
|
|
|
13,884
|
|
|
TOTAL ASSETS
|
$
|
1,639,308
|
|
|
1,636,927
|
|
|
|
|
|
|||
LIABILITIES:
|
|
|
|
|||
Deposits:
|
|
|
|
|||
Non-interest-bearing
|
$
|
354,391
|
|
|
322,571
|
|
Interest-bearing
|
993,889
|
|
|
978,348
|
|
|
Total deposits
|
1,348,280
|
|
|
1,300,919
|
|
|
Short-term borrowings
|
—
|
|
|
56,230
|
|
|
Long-term debt
|
40,994
|
|
|
47,032
|
|
|
Operating lease liabilities
|
5,446
|
|
|
—
|
|
|
Accrued interest and other liabilities
|
16,540
|
|
|
13,761
|
|
|
TOTAL LIABILITIES
|
1,411,260
|
|
|
1,417,942
|
|
|
|
|
|
|
|||
COMMITMENTS AND CONTINGENT LIABILITIES
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
SHAREHOLDERS' EQUITY:
|
|
|
|
|||
Preferred shares - no par value, authorized 1,000,000 shares, none outstanding
|
—
|
|
|
—
|
|
|
Common shares - no par value; authorized 19,000,000 shares at December 31, 2019 and 2018; issued 14,111,810 and 14,070,303 shares at December 31, 2019 and 2018, respectively
|
141,791
|
|
|
141,170
|
|
|
Retained earnings
|
104,431
|
|
|
94,547
|
|
|
Treasury shares at cost, 1,175,027 and 775,027 shares at December 31, 2019 and 2018, respectively
|
(18,847
|
)
|
|
(12,013
|
)
|
|
Accumulated other comprehensive income (loss), net of taxes
|
673
|
|
|
(4,719
|
)
|
|
TOTAL SHAREHOLDERS' EQUITY
|
228,048
|
|
|
218,985
|
|
|
|
|
|
|
|||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
1,639,308
|
|
|
1,636,927
|
|
|
2019
|
|
2018
|
|
2017
|
||||
INTEREST INCOME:
|
|
|
|
|
|
||||
Interest and fees on loans
|
$
|
59,009
|
|
|
47,489
|
|
|
36,571
|
|
Dividends on equity securities:
|
|
|
|
|
|
||||
With a readily determinable fair value
|
62
|
|
|
65
|
|
|
63
|
|
|
Without a readily determinable fair value
|
65
|
|
|
39
|
|
|
26
|
|
|
Interest on debt securities:
|
|
|
|
|
|
|
|
|
|
Taxable
|
3,601
|
|
|
3,666
|
|
|
4,239
|
|
|
Non-taxable
|
1,677
|
|
|
2,686
|
|
|
3,130
|
|
|
Interest on interest-bearing time deposits
|
11
|
|
|
58
|
|
|
—
|
|
|
Other investments
|
769
|
|
|
591
|
|
|
434
|
|
|
TOTAL INTEREST INCOME
|
65,194
|
|
|
54,594
|
|
|
44,463
|
|
|
|
|
|
|
|
|
||||
INTEREST EXPENSE:
|
|
|
|
|
|
|
|
|
|
Interest on deposits
|
9,526
|
|
|
5,753
|
|
|
3,378
|
|
|
Interest on short-term borrowings
|
227
|
|
|
311
|
|
|
209
|
|
|
Interest on long-term debt
|
1,035
|
|
|
361
|
|
|
12
|
|
|
TOTAL INTEREST EXPENSE
|
10,788
|
|
|
6,425
|
|
|
3,599
|
|
|
NET INTEREST INCOME
|
54,406
|
|
|
48,169
|
|
|
40,864
|
|
|
PROVISION FOR LOAN LOSSES
|
207
|
|
|
923
|
|
|
215
|
|
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
54,199
|
|
|
47,246
|
|
|
40,649
|
|
|
|
|
|
|
|
|
||||
NON-INTEREST INCOME:
|
|
|
|
|
|
|
|
|
|
Fiduciary income
|
4,354
|
|
|
3,958
|
|
|
3,473
|
|
|
Service charges and fees on deposit accounts
|
5,875
|
|
|
5,590
|
|
|
5,236
|
|
|
Net gains (losses) on sales of securities
|
(41
|
)
|
|
(8
|
)
|
|
233
|
|
|
Bank owned life insurance income
|
943
|
|
|
738
|
|
|
867
|
|
|
Net gains from sales of loans
|
328
|
|
|
223
|
|
|
166
|
|
|
Other operating income
|
889
|
|
|
549
|
|
|
483
|
|
|
TOTAL NON-INTEREST INCOME
|
12,348
|
|
|
11,050
|
|
|
10,458
|
|
|
|
|
|
|
|
|
||||
NON-INTEREST EXPENSE:
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
25,320
|
|
|
21,279
|
|
|
18,585
|
|
|
Equipment expenses
|
1,209
|
|
|
1,138
|
|
|
1,172
|
|
|
Occupancy expense, net
|
2,961
|
|
|
2,861
|
|
|
2,613
|
|
|
State financial institutions tax
|
1,669
|
|
|
1,197
|
|
|
1,137
|
|
|
Marketing
|
1,319
|
|
|
1,119
|
|
|
873
|
|
|
Amortization of intangibles
|
1,043
|
|
|
922
|
|
|
751
|
|
|
FDIC premiums
|
225
|
|
|
419
|
|
|
423
|
|
|
ATM expense
|
580
|
|
|
580
|
|
|
572
|
|
|
Computer maintenance and supplies
|
1,094
|
|
|
990
|
|
|
882
|
|
|
Telephone expense
|
707
|
|
|
649
|
|
|
735
|
|
|
Contracted services
|
1,865
|
|
|
1,547
|
|
|
1,255
|
|
|
Other real estate owned
|
53
|
|
|
20
|
|
|
10
|
|
|
Merger-related expenses
|
114
|
|
|
2,123
|
|
|
118
|
|
|
Other non-interest expense
|
5,363
|
|
|
5,658
|
|
|
4,737
|
|
|
TOTAL NON-INTEREST EXPENSE
|
43,522
|
|
|
40,502
|
|
|
33,863
|
|
|
|
|
|
|
|
|
||||
INCOME BEFORE INCOME TAXES
|
23,025
|
|
|
17,794
|
|
|
17,244
|
|
|
PROVISION FOR INCOME TAXES
|
4,113
|
|
|
2,949
|
|
|
4,272
|
|
|
NET INCOME
|
$
|
18,912
|
|
|
14,845
|
|
|
12,972
|
|
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.44
|
|
|
1.24
|
|
|
1.30
|
|
Diluted
|
1.44
|
|
|
1.24
|
|
|
1.29
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
13,078,920
|
|
|
11,935,350
|
|
|
10,005,575
|
|
|
Diluted
|
13,082,893
|
|
|
11,942,253
|
|
|
10,012,511
|
|
|
Common
Shares
Outstanding
|
|
|
Common
Shares
|
|
|
Retained
Earnings
|
|
|
Treasury
Shares
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
Total
Shareholders'
Equity
|
|
|
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 loss, 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 income, 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income
|
|
|
|
|
|
|
18,912
|
|
|
|
|
|
|
|
|
18,912
|
|
|
Other comprehensive loss, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
5,392
|
|
|
5,392
|
|
|
Dividend Reinvestment and Stock Purchase Plan
|
25,629
|
|
|
446
|
|
|
|
|
|
|
|
|
|
|
|
446
|
|
|
Exercise of stock options
|
3,374
|
|
|
41
|
|
|
|
|
|
|
|
|
41
|
|
||||
Repurchase of common stock
|
(400,000
|
)
|
|
|
|
|
|
(6,834
|
)
|
|
|
|
(6,834
|
)
|
||||
Compensation expense relating to restricted stock
|
12,504
|
|
|
134
|
|
|
|
|
|
|
|
|
134
|
|
||||
Common stock dividends, $0.69 per share
|
|
|
|
|
|
|
(9,028
|
)
|
|
|
|
|
|
|
|
(9,028
|
)
|
|
Balance, December 31, 2019
|
12,936,783
|
|
|
$
|
141,791
|
|
|
104,431
|
|
|
(18,847
|
)
|
|
673
|
|
|
228,048
|
|
•
|
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.
|
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.
|
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.
|
|
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
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
|||||
2019
|
|
|
|
|
|
|
|
|||||
Debt Securities Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
2,273
|
|
|
36
|
|
|
—
|
|
|
2,309
|
|
U.S. Agency notes
|
48,745
|
|
|
273
|
|
|
34
|
|
|
48,984
|
|
|
U.S. Agency mortgage-backed securities
|
83,977
|
|
|
672
|
|
|
243
|
|
|
84,406
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-taxable
|
22,174
|
|
|
161
|
|
|
14
|
|
|
22,321
|
|
|
Taxable
|
19,746
|
|
|
269
|
|
|
35
|
|
|
19,980
|
|
|
|
$
|
176,915
|
|
|
1,411
|
|
|
326
|
|
|
178,000
|
|
|
|
|
|
|
|
|
|
|||||
Debt Securities Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
24,300
|
|
|
343
|
|
|
5
|
|
|
24,638
|
|
Taxable
|
3,225
|
|
|
25
|
|
|
—
|
|
|
3,250
|
|
|
|
$
|
27,525
|
|
|
368
|
|
|
5
|
|
|
27,888
|
|
|
|
|
|
|
|
|
|
|||||
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
|
|
|
Less Than Twelve Months
|
|
Twelve Months or More
|
|||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||
2019
|
|
|
|
|
|
|
|
|||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|||||
U.S. Treasury notes
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
U.S. Agency notes
|
3,586
|
|
|
11
|
|
|
11,939
|
|
|
23
|
|
|
U.S. Agency mortgage-backed securities
|
10,555
|
|
|
10
|
|
|
19,233
|
|
|
233
|
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
||
Non-taxable
|
2,631
|
|
|
2
|
|
|
1,257
|
|
|
12
|
|
|
Taxable
|
5,067
|
|
|
35
|
|
|
450
|
|
|
—
|
|
|
|
$
|
21,839
|
|
|
58
|
|
|
32,879
|
|
|
268
|
|
|
|
|
|
|
|
|
|
|||||
Held-to-Maturity:
|
|
|
|
|
|
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|||||
Non-taxable
|
$
|
54
|
|
|
—
|
|
|
2,660
|
|
|
5
|
|
Taxable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$
|
54
|
|
|
—
|
|
|
2,660
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|||||
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
|
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
|||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|||||
Due within one year
|
$
|
11,465
|
|
|
11,473
|
|
|
2,435
|
|
|
2,438
|
|
Due from one to five years
|
54,816
|
|
|
55,141
|
|
|
7,404
|
|
|
7,432
|
|
|
Due from five to ten years
|
26,657
|
|
|
26,980
|
|
|
1,980
|
|
|
2,007
|
|
|
Due after ten years
|
—
|
|
|
—
|
|
|
15,706
|
|
|
16,011
|
|
|
|
92,938
|
|
|
93,594
|
|
|
27,525
|
|
|
27,888
|
|
|
U.S. Agency mortgage-backed securities
|
83,977
|
|
|
84,406
|
|
|
—
|
|
|
—
|
|
|
|
$
|
176,915
|
|
|
178,000
|
|
|
27,525
|
|
|
27,888
|
|
|
2019
|
|
2018
|
|
2017
|
||||
Proceeds from sales
|
$
|
84,521
|
|
|
8,545
|
|
|
43,246
|
|
Gross realized gains
|
228
|
|
|
21
|
|
|
247
|
|
|
Gross realized losses
|
269
|
|
|
29
|
|
|
14
|
|
|
2019
|
|
2018
|
|||||||||
|
Amortized
Cost |
|
Fair
Value |
|
Amortized Cost
|
|
Fair Value
|
|||||
Mutual funds
|
$
|
1,371
|
|
|
1,345
|
|
|
1,651
|
|
|
1,559
|
|
Equity securities
|
741
|
|
|
967
|
|
|
471
|
|
|
519
|
|
|
Total equity securities with a readily determinable fair value
|
$
|
2,112
|
|
|
2,312
|
|
|
2,122
|
|
|
2,078
|
|
|
2019
|
|
2018
|
|||
Net gains (losses) recognized
|
$
|
264
|
|
|
(73
|
)
|
Less net realized gains on equity securities sold
|
21
|
|
|
20
|
|
|
Unrealized gains (losses) recognized and still held at period end
|
$
|
285
|
|
|
(93
|
)
|
|
2019
|
|
2018
|
|||
Commercial and industrial
|
$
|
78,306
|
|
|
77,740
|
|
Commercial, secured by real estate
|
804,953
|
|
|
740,647
|
|
|
Residential real estate
|
322,533
|
|
|
349,127
|
|
|
Consumer
|
25,232
|
|
|
17,283
|
|
|
Agricultural
|
11,509
|
|
|
13,297
|
|
|
Other loans, including deposit overdrafts
|
1,193
|
|
|
450
|
|
|
|
1,243,726
|
|
|
1,198,544
|
|
|
Deferred origination (fees) costs, net
|
(275
|
)
|
|
79
|
|
|
|
1,243,451
|
|
|
1,198,623
|
|
|
Less allowance for loan losses
|
4,045
|
|
|
4,046
|
|
|
Loans-net
|
$
|
1,239,406
|
|
|
1,194,577
|
|
|
2019
|
|
2018
|
|||
Non-accrual loans:
|
|
|
|
|||
Commercial and industrial
|
$
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
2,467
|
|
|
1,767
|
|
|
Residential real estate
|
743
|
|
|
1,007
|
|
|
Agricultural
|
—
|
|
|
177
|
|
|
Total non-accrual loans
|
3,210
|
|
|
2,951
|
|
|
Past-due 90 days or more and still accruing
|
—
|
|
|
149
|
|
|
Total non-accrual and past-due 90 days or more and still accruing
|
3,210
|
|
|
3,100
|
|
|
Accruing restructured loans
|
6,609
|
|
|
10,516
|
|
|
Total
|
$
|
9,819
|
|
|
13,616
|
|
|
|
|
|
|||
Percentage of total non-accrual and past-due 90 days or more and still accruing to total loans
|
0.26
|
%
|
|
0.26
|
%
|
|
|
|
|
|
|||
Percentage of total non-accrual, past-due 90 days or more and still accruing, and accruing restructured loans to total loans
|
0.79
|
%
|
|
1.14
|
%
|
|
Commercial
& Industrial
|
|
Commercial,
Secured by
Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Agricultural
|
|
Other
|
|
Total
|
||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of year
|
$
|
400
|
|
|
2,745
|
|
|
767
|
|
|
87
|
|
|
46
|
|
|
1
|
|
|
4,046
|
|
Provision charged to expenses
|
103
|
|
|
266
|
|
|
(264
|
)
|
|
4
|
|
|
(12
|
)
|
|
110
|
|
|
207
|
|
|
Losses charged off
|
(47
|
)
|
|
(143
|
)
|
|
(272
|
)
|
|
(24
|
)
|
|
—
|
|
|
(181
|
)
|
|
(667
|
)
|
|
Recoveries
|
—
|
|
|
56
|
|
|
297
|
|
|
32
|
|
|
—
|
|
|
74
|
|
|
459
|
|
|
Balance, end of year
|
$
|
456
|
|
|
2,924
|
|
|
528
|
|
|
99
|
|
|
34
|
|
|
4
|
|
|
4,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
6
|
|
|
272
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295
|
|
Collectively evaluated for impairment
|
450
|
|
|
2,652
|
|
|
511
|
|
|
99
|
|
|
34
|
|
|
4
|
|
|
3,750
|
|
|
Acquired credit impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance, end of year
|
$
|
456
|
|
|
2,924
|
|
|
528
|
|
|
99
|
|
|
34
|
|
|
4
|
|
|
4,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
$
|
230
|
|
|
7,432
|
|
|
949
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
8,638
|
|
Collectively evaluated for impairment
|
77,430
|
|
|
793,191
|
|
|
319,188
|
|
|
25,328
|
|
|
11,523
|
|
|
930
|
|
|
1,227,590
|
|
|
Acquired credit impaired loans
|
711
|
|
|
3,531
|
|
|
2,718
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|
7,223
|
|
|
Balance, end of year
|
$
|
78,371
|
|
|
804,154
|
|
|
322,855
|
|
|
25,355
|
|
|
11,523
|
|
|
1,193
|
|
|
1,243,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
|
Commercial
& Industrial
|
|
Commercial,
Secured by
Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Agricultural
|
|
Other
|
|
Total
|
||||||||
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
|
|
•
|
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
|
||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
76,236
|
|
|
233
|
|
|
1,902
|
|
|
—
|
|
|
78,371
|
|
Commercial, secured by real estate
|
789,319
|
|
|
3,007
|
|
|
11,828
|
|
|
—
|
|
|
804,154
|
|
|
Residential real estate
|
319,075
|
|
|
267
|
|
|
3,513
|
|
|
—
|
|
|
322,855
|
|
|
Consumer
|
25,342
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
25,355
|
|
|
Agricultural
|
11,523
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,523
|
|
|
Other
|
1,193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,193
|
|
|
Total
|
$
|
1,222,688
|
|
|
3,507
|
|
|
17,256
|
|
|
—
|
|
|
1,243,451
|
|
|
|
|
|
|
|
|
|
|
|
||||||
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
|
|
|
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
|
||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial & industrial
|
$
|
283
|
|
|
—
|
|
|
—
|
|
|
283
|
|
|
78,088
|
|
|
78,371
|
|
|
—
|
|
Commercial, secured by real estate
|
339
|
|
|
—
|
|
|
1,171
|
|
|
1,510
|
|
|
802,644
|
|
|
804,154
|
|
|
—
|
|
|
Residential real estate
|
1,573
|
|
|
260
|
|
|
423
|
|
|
2,256
|
|
|
320,599
|
|
|
322,855
|
|
|
—
|
|
|
Consumer
|
27
|
|
|
9
|
|
|
—
|
|
|
36
|
|
|
25,319
|
|
|
25,355
|
|
|
—
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,523
|
|
|
11,523
|
|
|
—
|
|
|
Other
|
930
|
|
|
—
|
|
|
—
|
|
|
930
|
|
|
263
|
|
|
1,193
|
|
|
—
|
|
|
Total
|
$
|
3,152
|
|
|
269
|
|
|
1,594
|
|
|
5,015
|
|
|
1,238,436
|
|
|
1,243,451
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial & industrial
|
$
|
711
|
|
|
1,253
|
|
|
—
|
|
|
836
|
|
|
83
|
|
Commercial, secured by real estate
|
8,625
|
|
|
9,373
|
|
|
—
|
|
|
12,748
|
|
|
1,213
|
|
|
Residential real estate
|
3,118
|
|
|
3,651
|
|
|
—
|
|
|
3,704
|
|
|
311
|
|
|
Consumer
|
10
|
|
|
10
|
|
|
—
|
|
|
12
|
|
|
1
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
263
|
|
|
392
|
|
|
—
|
|
|
310
|
|
|
35
|
|
|
Total
|
$
|
12,727
|
|
|
14,679
|
|
|
—
|
|
|
17,610
|
|
|
1,643
|
|
|
|
|
|
|
|
|
|
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
230
|
|
|
235
|
|
|
6
|
|
|
247
|
|
|
15
|
|
Commercial, secured by real estate
|
2,338
|
|
|
2,485
|
|
|
272
|
|
|
2,513
|
|
|
64
|
|
|
Residential real estate
|
549
|
|
|
549
|
|
|
17
|
|
|
528
|
|
|
35
|
|
|
Consumer
|
17
|
|
|
17
|
|
|
—
|
|
|
20
|
|
|
1
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
3,134
|
|
|
3,286
|
|
|
295
|
|
|
3,308
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & industrial
|
$
|
941
|
|
|
1,488
|
|
|
6
|
|
|
1,083
|
|
|
98
|
|
Commercial, secured by real estate
|
10,963
|
|
|
11,858
|
|
|
272
|
|
|
15,261
|
|
|
1,277
|
|
|
Residential real estate
|
3,667
|
|
|
4,200
|
|
|
17
|
|
|
4,232
|
|
|
346
|
|
|
Consumer
|
27
|
|
|
27
|
|
|
—
|
|
|
32
|
|
|
2
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
263
|
|
|
392
|
|
|
—
|
|
|
310
|
|
|
35
|
|
|
Total
|
$
|
15,861
|
|
|
17,965
|
|
|
295
|
|
|
20,918
|
|
|
1,758
|
|
|
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
|
|
|
Average
Recorded Investment |
|
Interest
Income Recognized |
|||
2017
|
|
|
|
|||
With no related allowance recorded:
|
|
|
|
|||
Commercial & industrial
|
$
|
685
|
|
|
88
|
|
Commercial, secured by real estate
|
14,113
|
|
|
1,068
|
|
|
Residential real estate
|
3,216
|
|
|
546
|
|
|
Consumer
|
20
|
|
|
2
|
|
|
Agricultural
|
269
|
|
|
12
|
|
|
Other
|
441
|
|
|
55
|
|
|
Total
|
$
|
18,744
|
|
|
1,771
|
|
|
|
|
|
|||
With an allowance recorded:
|
|
|
|
|||
Commercial & industrial
|
$
|
311
|
|
|
18
|
|
Commercial, secured by real estate
|
2,739
|
|
|
45
|
|
|
Residential real estate
|
596
|
|
|
19
|
|
|
Consumer
|
43
|
|
|
3
|
|
|
Agricultural
|
—
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
Total
|
$
|
3,689
|
|
|
85
|
|
|
|
|
|
|||
Total:
|
|
|
|
|||
Commercial & industrial
|
$
|
996
|
|
|
106
|
|
Commercial, secured by real estate
|
16,852
|
|
|
1,113
|
|
|
Residential real estate
|
3,812
|
|
|
565
|
|
|
Consumer
|
63
|
|
|
5
|
|
|
Agricultural
|
269
|
|
|
12
|
|
|
Other
|
441
|
|
|
55
|
|
|
Total
|
$
|
22,433
|
|
|
1,856
|
|
|
2019
|
|
2018
|
||||||||||||||||||
|
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
|
2
|
|
|
258
|
|
|
258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential real estate
|
3
|
|
|
120
|
|
|
120
|
|
|
3
|
|
|
505
|
|
|
505
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Totals
|
5
|
|
|
$
|
378
|
|
|
$
|
378
|
|
|
4
|
|
|
$
|
506
|
|
|
$
|
506
|
|
|
Term Modification
|
|
Rate Modification
|
|
Interest Only
|
|
Principal Forgiveness
|
|
Combination
|
|
Total Modifications
|
|||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|
258
|
|
|
Residential real estate
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|
378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential real estate
|
380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
505
|
|
|
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
Total
|
$
|
380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
506
|
|
|
2019
|
|
2018
|
||
Impaired loans without a valuation allowance at the end of the period
|
252
|
|
|
380
|
|
Impaired loans with a valuation allowance at the end of the period
|
89
|
|
|
126
|
|
|
2019
|
|
2018
|
|
2017
|
||||
Balance, beginning of year
|
$
|
475
|
|
|
396
|
|
|
428
|
|
Amount obtained through a merger
|
—
|
|
|
91
|
|
|
—
|
|
|
Amount capitalized to mortgage servicing rights
|
156
|
|
|
113
|
|
|
91
|
|
|
Amortization of mortgage servicing rights
|
(148
|
)
|
|
(125
|
)
|
|
(123
|
)
|
|
Balance, end of year
|
$
|
483
|
|
|
475
|
|
|
396
|
|
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
|
|
|
2019
|
|
2018
|
|||
Acquired from First Capital Bancshares, Inc.
|
|
|
|
|||
Commercial & industrial
|
$
|
5
|
|
|
13
|
|
Commercial, secured by real estate
|
792
|
|
|
818
|
|
|
Residential real estate
|
551
|
|
|
911
|
|
|
Other loans, including deposit overdrafts
|
—
|
|
|
—
|
|
|
Total
|
$
|
1,348
|
|
|
1,742
|
|
|
|
|
|
|||
Acquired from Eaton National Bank & Trust Co.
|
|
|
|
|||
Commercial & industrial
|
$
|
423
|
|
|
503
|
|
Commercial, secured by real estate
|
815
|
|
|
1,547
|
|
|
Residential real estate
|
685
|
|
|
784
|
|
|
Other loans, including deposit overdrafts
|
263
|
|
|
336
|
|
|
Total
|
$
|
2,186
|
|
|
3,170
|
|
|
|
|
|
|||
Acquired from BNB Bancorp, Inc.
|
|
|
|
|||
Commercial & industrial
|
$
|
—
|
|
|
—
|
|
Commercial, secured by real estate
|
1,219
|
|
|
1,396
|
|
|
Residential real estate
|
100
|
|
|
158
|
|
|
Other loans, including deposit overdrafts
|
—
|
|
|
—
|
|
|
Total
|
$
|
1,319
|
|
|
1,554
|
|
|
|
|
|
|||
Acquired from Columbus First Bancorp, Inc.
|
|
|
|
|||
Commercial & industrial
|
$
|
283
|
|
|
406
|
|
Commercial, secured by real estate
|
705
|
|
|
2,554
|
|
|
Residential real estate
|
1,382
|
|
|
1,376
|
|
|
Other loans, including deposit overdrafts
|
—
|
|
|
—
|
|
|
Total
|
$
|
2,370
|
|
|
4,336
|
|
|
|
|
|
|||
Total
|
|
|
|
|||
Commercial & industrial
|
$
|
711
|
|
|
922
|
|
Commercial, secured by real estate
|
3,531
|
|
|
6,315
|
|
|
Residential real estate
|
2,718
|
|
|
3,229
|
|
|
Other loans, including deposit overdrafts
|
263
|
|
|
336
|
|
|
Total
|
$
|
7,223
|
|
|
10,802
|
|
|
2019
|
|
2018
|
|||
Outstanding balance
|
$
|
9,139
|
|
|
13,371
|
|
Carrying amount
|
7,223
|
|
|
10,802
|
|
|
2019
|
|
2018
|
|||
Accretable discount, beginning of year
|
$
|
743
|
|
|
669
|
|
Accretable discount acquired during period
|
—
|
|
|
151
|
|
|
Reclass from nonaccretable discount to accretable discount
|
243
|
|
|
4
|
|
|
Disposals
|
1
|
|
|
—
|
|
|
Less accretion
|
(507
|
)
|
|
(81
|
)
|
|
Accretable discount, end of year
|
$
|
480
|
|
|
743
|
|
|
2019
|
|
2018
|
|||
Balance, beginning of year
|
$
|
244
|
|
|
—
|
|
Additions
|
—
|
|
|
244
|
|
|
Additions due to merger
|
—
|
|
|
35
|
|
|
Reductions due to sales
|
—
|
|
|
(35
|
)
|
|
Balance, end of year
|
$
|
244
|
|
|
244
|
|
|
2019
|
|
2018
|
|||
Land
|
$
|
8,000
|
|
|
8,000
|
|
Buildings
|
31,007
|
|
|
30,903
|
|
|
Equipment
|
16,885
|
|
|
16,089
|
|
|
Construction in progress
|
2,976
|
|
|
142
|
|
|
Total
|
58,868
|
|
|
55,134
|
|
|
Less accumulated depreciation
|
24,081
|
|
|
22,507
|
|
|
Premises and equipment, net
|
$
|
34,787
|
|
|
32,627
|
|
Operating lease expense
|
$
|
561
|
|
Short-term lease expense
|
49
|
|
|
Variable lease expense
|
10
|
|
|
Other
|
7
|
|
|
Total lease expense
|
$
|
627
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
480
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
5,775
|
|
Weighted average remaining lease term in years for operating leases
|
39 years
|
|
|
Weighted average discount rate for operating leases
|
3.69
|
%
|
2020
|
$
|
458
|
|
2021
|
396
|
|
|
2022
|
258
|
|
|
2023
|
235
|
|
|
2024
|
237
|
|
|
Thereafter
|
10,099
|
|
|
|
11,683
|
|
|
Less effects of discounting
|
6,237
|
|
|
Operating lease liabilities recognized
|
$
|
5,446
|
|
|
2019
|
|
2018
|
||||
Balance, beginning of year
|
$
|
59,221
|
|
|
$
|
30,183
|
|
Additions from acquisitions
|
—
|
|
|
29,038
|
|
||
Balance, end of year
|
$
|
59,221
|
|
|
$
|
59,221
|
|
|
2019
|
|
2018
|
|||||||||||||||
|
Gross
Intangible
Assets
|
|
Accumulated
Amortization
|
|
Net
Intangible
Assets
|
|
Gross
Intangible Assets |
|
Accumulated
Amortization |
|
Net
Intangible Assets |
|||||||
Core deposit intangibles
|
$
|
8,544
|
|
|
5,021
|
|
|
3,523
|
|
|
8,544
|
|
|
3,977
|
|
|
4,567
|
|
Mortgage servicing rights
|
1,237
|
|
|
754
|
|
|
483
|
|
|
1,483
|
|
|
1,008
|
|
|
475
|
|
|
Total
|
$
|
9,781
|
|
|
5,775
|
|
|
4,006
|
|
|
10,027
|
|
|
4,985
|
|
|
5,042
|
|
2020
|
$
|
1,160
|
|
2021
|
1,143
|
|
|
2022
|
545
|
|
|
2023
|
504
|
|
|
2024
|
388
|
|
|
2019
|
|
2018
|
|||
Affordable housing tax credit investment
|
$
|
7,000
|
|
|
5,000
|
|
Less amortization
|
810
|
|
|
492
|
|
|
Net affordable housing tax credit investment
|
$
|
6,190
|
|
|
4,508
|
|
|
|
|
|
|||
Unfunded commitment
|
$
|
4,596
|
|
|
3,372
|
|
|
Year ended December 31,
|
||||||||
|
2019
|
|
2018
|
|
2017
|
||||
Tax credits and other tax benefits recognized
|
$
|
387
|
|
|
267
|
|
|
180
|
|
Tax credit amortization expense included in provision for income taxes
|
318
|
|
|
261
|
|
|
138
|
|
2020
|
$
|
204,543
|
|
2021
|
56,137
|
|
|
2022
|
27,856
|
|
|
2023
|
30,769
|
|
|
2024
|
3,561
|
|
|
Thereafter
|
1,262
|
|
|
|
$
|
324,128
|
|
|
2019
|
|
2018
|
||||||||||
|
Outstanding Balance
|
|
Average Rate
|
|
Outstanding Balance
|
|
Average Rate
|
||||||
Maturing within one year
|
18,998
|
|
|
2.40
|
%
|
|
6,052
|
|
|
1.74
|
%
|
||
Maturing one year through two years
|
11,996
|
|
|
2.42
|
%
|
|
18,988
|
|
|
2.40
|
%
|
||
Maturing two years through three years
|
5,000
|
|
|
2.97
|
%
|
|
11,992
|
|
|
2.42
|
%
|
||
Maturing three years through four years
|
5,000
|
|
|
3.02
|
%
|
|
5,000
|
|
|
2.97
|
%
|
||
Maturing four years through five years
|
—
|
|
|
—
|
%
|
|
5,000
|
|
|
3.02
|
%
|
||
Total
|
$
|
40,994
|
|
|
2.55
|
%
|
|
$
|
47,032
|
|
|
2.45
|
%
|
|
2019
|
|
2018
|
||||||||||
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
||||||
Line of credit
|
$
|
—
|
|
|
—
|
%
|
|
$
|
4,230
|
|
|
3.00
|
%
|
FHLB short-term advance
|
—
|
|
|
—
|
%
|
|
52,000
|
|
|
2.48
|
%
|
||
|
$
|
—
|
|
|
—
|
%
|
|
$
|
56,230
|
|
|
2.52
|
%
|
|
2019
|
|
2018
|
|
2017
|
||||
Income taxes currently payable
|
$
|
3,694
|
|
|
2,721
|
|
|
3,018
|
|
Revaluation of net deferred tax liability
|
—
|
|
|
—
|
|
|
(224
|
)
|
|
Deferred income tax provision (benefit)
|
419
|
|
|
228
|
|
|
1,478
|
|
|
Provision for income taxes
|
$
|
4,113
|
|
|
2,949
|
|
|
4,272
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Statutory tax rate
|
21.0
|
%
|
|
21.0
|
%
|
|
34.0
|
%
|
Increase (decrease) resulting from -
|
|
|
|
|
|
|
|
|
Tax exempt interest
|
(1.4
|
)%
|
|
(3.1
|
)%
|
|
(6.0
|
)%
|
Tax exempt income on bank owned life insurance
|
(0.9
|
)%
|
|
(0.9
|
)%
|
|
(1.7
|
)%
|
Revaluation of net deferred tax liability
|
—
|
%
|
|
—
|
%
|
|
(1.3
|
)%
|
Captive insurance premium income
|
(0.8
|
)%
|
|
(0.9
|
)%
|
|
(0.9
|
)%
|
Other – net
|
—
|
%
|
|
0.5
|
%
|
|
0.7
|
%
|
Effective tax rate
|
17.9
|
%
|
|
16.6
|
%
|
|
24.8
|
%
|
|
2019
|
|
2018
|
|||
Deferred tax assets:
|
|
|
|
|||
Allowance for loan losses
|
$
|
849
|
|
|
849
|
|
Net unrealized losses on investment securities available-for-sale
|
—
|
|
|
1,240
|
|
|
Fair value adjustment on loans acquired from mergers
|
451
|
|
|
723
|
|
|
Write-down of other real estate owned
|
10
|
|
|
—
|
|
|
Deferred compensation
|
706
|
|
|
706
|
|
|
Other
|
459
|
|
|
432
|
|
|
|
2,475
|
|
|
3,950
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
Depreciation of premises and equipment
|
(1,621
|
)
|
|
(1,551
|
)
|
|
Net unrealized gains on investment securities available-for-sale
|
(270
|
)
|
|
—
|
|
|
Amortization of intangibles
|
(1,537
|
)
|
|
(1,499
|
)
|
|
Prepaid expenses
|
(246
|
)
|
|
(243
|
)
|
|
Deferred loan fees
|
—
|
|
|
(1
|
)
|
|
FHLB stock dividends
|
(216
|
)
|
|
(216
|
)
|
|
Fair value adjustment on securities acquired from mergers
|
(3
|
)
|
|
(6
|
)
|
|
|
(3,893
|
)
|
|
(3,516
|
)
|
|
Net deferred tax (liabilities) assets
|
$
|
(1,418
|
)
|
|
434
|
|
|
2019
|
|
2018
|
|||
Commitments to extend credit:
|
|
|
|
|||
Commercial loans
|
$
|
50,235
|
|
|
23,978
|
|
Other loans:
|
|
|
|
|||
Fixed rate
|
4,431
|
|
|
2,961
|
|
|
Adjustable rate
|
1,199
|
|
|
1,077
|
|
|
Unused lines of credit:
|
|
|
|
|||
Fixed rate
|
28,796
|
|
|
31,446
|
|
|
Adjustable rate
|
174,577
|
|
|
169,031
|
|
|
Unused overdraft protection amounts on demand and NOW accounts
|
16,304
|
|
|
16,249
|
|
|
Standby letters of credit
|
883
|
|
|
1,080
|
|
|
|
$
|
276,425
|
|
|
245,822
|
|
|
Minimum
Requirement
|
|
Minimum Requirement with Capital Conservation Buffer
|
|
To Be Considered
Well-Capitalized
|
|||
Ratio of Common Equity Tier 1 Capital to risk-weighted assets
|
4.5
|
%
|
|
7.0
|
%
|
|
6.5
|
%
|
Ratio of tier 1 capital to risk-weighted assets
|
6.0
|
%
|
|
8.5
|
%
|
|
8.0
|
%
|
Ratio of total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets
|
8.0
|
%
|
|
10.5
|
%
|
|
10.0
|
%
|
Leverage ratio (tier 1 capital to adjusted quarterly average total assets)
|
4.0
|
%
|
|
N/A
|
|
|
5.0
|
%
|
|
2019
|
|
2018
|
||
Regulatory Capital:
|
|
|
|
||
Shareholders' equity
|
222,065
|
|
|
215,395
|
|
Goodwill and other intangible assets
|
(62,744
|
)
|
|
(63,788
|
)
|
Accumulated other comprehensive (income) loss
|
(673
|
)
|
|
4,719
|
|
Tier 1 risk-based capital
|
158,648
|
|
|
156,326
|
|
Eligible allowance for loan losses
|
4,045
|
|
|
4,046
|
|
Total risk-based capital
|
162,693
|
|
|
160,372
|
|
Capital Ratios:
|
|
|
|
|
|
Common Equity Tier 1 Capital to risk-weighted assets
|
12.21
|
%
|
|
12.65
|
%
|
Tier 1 capital to risk-weighted assets
|
12.21
|
%
|
|
12.65
|
%
|
Total capital (tier 1 capital plus tier 2 capital) to risk-weighted assets
|
12.52
|
%
|
|
12.98
|
%
|
Leverage ratio (tier 1 capital to adjusted quarterly average total assets)
|
10.06
|
%
|
|
9.96
|
%
|
|
2019
|
|
2018
|
|||||||||||||||
|
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
|
$
|
(4,631
|
)
|
|
(88
|
)
|
|
(4,719
|
)
|
|
(2,200
|
)
|
|
(142
|
)
|
|
(2,342
|
)
|
Cumulative effect of changes in accounting principles
|
—
|
|
|
—
|
|
|
—
|
|
|
(498
|
)
|
|
(27
|
)
|
|
(525
|
)
|
|
Balance at beginning of period, as adjusted
|
(4,631
|
)
|
|
(88
|
)
|
|
(4,719
|
)
|
|
(2,698
|
)
|
|
(169
|
)
|
|
(2,867
|
)
|
|
Before reclassifications
|
5,456
|
|
|
(96
|
)
|
|
5,360
|
|
|
(1,939
|
)
|
|
81
|
|
|
(1,858
|
)
|
|
Reclassifications
|
32
|
|
|
—
|
|
|
32
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
Balance at end of year
|
$
|
857
|
|
|
(184
|
)
|
|
673
|
|
|
(4,631
|
)
|
|
(88
|
)
|
|
(4,719
|
)
|
|
2019
|
|
2018
|
|
Affected Line Item in the Consolidated Statements of Income
|
|||
Realized gain (loss) on sales of securities
|
$
|
41
|
|
|
(8
|
)
|
|
Net gain on sale of securities
|
Less provision (benefit) for income taxes
|
9
|
|
|
(2
|
)
|
|
Provision for income taxes
|
|
Reclassification adjustment, net of taxes
|
$
|
32
|
|
|
(6
|
)
|
|
|
Legal name
|
|
Pentegra Defined Benefit Plan for Financial Institutions
|
Plan's employer identification number
|
|
13-5645888
|
Plan number
|
|
333
|
|
2019
|
|
2018
|
|
2017
|
||||
Qualified noncontributory defined benefit retirement plan
|
$
|
1,039
|
|
|
1,048
|
|
|
1,054
|
|
401(k) plan
|
524
|
|
|
457
|
|
|
374
|
|
|
2019
|
|
2018
|
|
2017
|
||||
Service cost
|
$
|
—
|
|
|
—
|
|
|
—
|
|
Interest cost
|
77
|
|
|
69
|
|
|
69
|
|
|
Amortization of unrecognized (gain) loss
|
—
|
|
|
16
|
|
|
—
|
|
|
Net periodic pension cost
|
$
|
77
|
|
|
85
|
|
|
69
|
|
|
2019
|
|
2018
|
|
2017
|
||||
Projected benefit obligation at beginning of year
|
$
|
1,900
|
|
|
1,971
|
|
|
1,727
|
|
Service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest cost
|
77
|
|
|
69
|
|
|
69
|
|
|
Actuarial (gain) or loss
|
122
|
|
|
(86
|
)
|
|
238
|
|
|
Benefits paid
|
(54
|
)
|
|
(54
|
)
|
|
(63
|
)
|
|
Projected benefit obligation at end of year
|
$
|
2,045
|
|
|
1,900
|
|
|
1,971
|
|
|
2019
|
|
2018
|
|
2017
|
||||
Net actuarial loss
|
$
|
184
|
|
|
88
|
|
|
141
|
|
2020
|
$
|
145
|
|
2021
|
145
|
|
|
2022
|
145
|
|
|
2023
|
145
|
|
|
2024
|
145
|
|
|
2025-2029
|
694
|
|
|
|
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
|
|
9,904
|
|
|
11.96
|
|
|
1.1
|
|
9,904
|
|
|
11.96
|
|
|
1.1
|
|
2019
|
|
2018
|
|
2017
|
||||
Intrinsic value of options exercised
|
$
|
20
|
|
|
50
|
|
|
25
|
|
Cash received from options exercised
|
41
|
|
|
72
|
|
|
51
|
|
|
Tax benefit realized from options exercised
|
3
|
|
|
7
|
|
|
5
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
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,
|
16,958
|
|
|
$
|
18.94
|
|
|
8,817
|
|
|
$
|
16.44
|
|
|
8,624
|
|
|
$
|
15.47
|
|
Granted
|
12,504
|
|
|
16.95
|
|
|
10,634
|
|
|
19.20
|
|
|
4,027
|
|
|
22.60
|
|
|||
Vested
|
(11,710
|
)
|
|
18.19
|
|
|
(2,493
|
)
|
|
17.38
|
|
|
(3,834
|
)
|
|
16.73
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at December 31,
|
17,752
|
|
|
$
|
18.03
|
|
|
16,958
|
|
|
$
|
18.94
|
|
|
8,817
|
|
|
$
|
16.44
|
|
|
2019
|
|
2018
|
|
2017
|
||||
Net income
|
$
|
18,912
|
|
|
14,845
|
|
|
12,972
|
|
Less allocation of earnings and dividends to participating securities
|
31
|
|
|
18
|
|
|
7
|
|
|
Net income allocated to common shareholders
|
18,881
|
|
|
14,827
|
|
|
12,965
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding, gross
|
13,100,161
|
|
|
11,950,360
|
|
|
10,011,358
|
|
|
Less average participating securities
|
21,241
|
|
|
15,010
|
|
|
5,783
|
|
|
Weighted average number of shares outstanding used in the calculation of basic earnings per common share
|
13,078,920
|
|
|
11,935,350
|
|
|
10,005,575
|
|
|
Add dilutive effect of:
|
|
|
|
|
|
|
|
|
|
Stock options
|
3,973
|
|
|
6,903
|
|
|
6,936
|
|
|
Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share
|
13,082,893
|
|
|
11,942,253
|
|
|
10,012,511
|
|
|
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.44
|
|
|
1.24
|
|
|
1.30
|
|
Diluted
|
1.44
|
|
|
1.24
|
|
|
1.29
|
|
|
2019
|
|
2018
|
|||
Beginning balance
|
$
|
2,438
|
|
|
1,870
|
|
New loans and advances
|
609
|
|
|
419
|
|
|
Change in composition of related parties
|
—
|
|
|
1,052
|
|
|
Reductions
|
(667
|
)
|
|
(903
|
)
|
|
Ending Balance
|
$
|
2,380
|
|
|
2,438
|
|
•
|
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) |
|||||
2019
|
|
|
|
|
|
|
|
||||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
||||||
Equity securities with a readily determinable fair value:
|
|
|
|
|
|
|
|
||||||
Equity securities
|
$
|
967
|
|
|
967
|
|
|
—
|
|
|
—
|
|
|
Mutual funds
|
45
|
|
|
45
|
|
|
—
|
|
|
—
|
|
||
Mutual funds measured at net asset value
|
1,300
|
|
|
1,300
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
||||||
Debt securities available-for-sale:
|
|
|
|
|
|
|
|
||||||
U.S. Treasury notes
|
2,309
|
|
|
2,309
|
|
|
—
|
|
|
—
|
|
||
U.S. Agency notes
|
48,984
|
|
|
—
|
|
|
48,984
|
|
|
—
|
|
||
U.S. Agency mortgage-backed securities
|
84,406
|
|
|
—
|
|
|
84,406
|
|
|
—
|
|
||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Non-taxable
|
22,321
|
|
|
—
|
|
|
22,321
|
|
|
—
|
|
||
Taxable
|
19,980
|
|
|
—
|
|
|
19,980
|
|
|
—
|
|
||
Total recurring fair value measurements
|
$
|
180,312
|
|
|
4,621
|
|
|
175,691
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
|
|
|
|
||
Impaired loans
|
$
|
2,840
|
|
|
—
|
|
|
—
|
|
|
2,840
|
|
|
Other real estate owned and repossessed assets
|
197
|
|
|
—
|
|
|
—
|
|
|
197
|
|
||
Total nonrecurring fair value measurements
|
$
|
3,037
|
|
|
—
|
|
|
—
|
|
|
3,037
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
||
Recurring fair value measurement:
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity securities with a readily determinable fair value:
|
|
|
|
|
|
|
|
||||||
Trust preferred securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
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
|
|
|
|
|
|
|
|
|
|
Range
|
|||||||||
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
High
|
|
Low
|
|
Weighted Average
|
|||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impaired loans
|
|
$
|
1,931
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
|||||||
|
|
909
|
|
|
Discounted cash flows
|
|
Discount rate
|
|
8.25
|
%
|
|
4.50
|
%
|
|
6.83
|
%
|
|
Other real estate owned
|
|
197
|
|
|
Estimated sales price
|
|
Adjustments for comparable properties, discounts to reflect current market conditions
|
|
Not applicable
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
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
|
|
|
|
|
|
|
|
|
|
|
|
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) |
||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
20,765
|
|
|
20,765
|
|
|
20,765
|
|
|
—
|
|
|
—
|
|
Debt securities, held-to-maturity
|
27,525
|
|
|
27,888
|
|
|
—
|
|
|
—
|
|
|
27,888
|
|
|
Federal Reserve Bank stock
|
4,652
|
|
|
4,652
|
|
|
4,652
|
|
|
—
|
|
|
—
|
|
|
Federal Home Loan Bank stock
|
5,203
|
|
|
5,203
|
|
|
5,203
|
|
|
—
|
|
|
—
|
|
|
Loans, net
|
1,239,406
|
|
|
1,252,156
|
|
|
—
|
|
|
—
|
|
|
1,252,156
|
|
|
Accrued interest receivable
|
—
|
|
|
3,911
|
|
|
—
|
|
|
3,911
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
FINANCIAL LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
1,348,280
|
|
|
1,352,061
|
|
|
1,024,162
|
|
|
327,899
|
|
|
—
|
|
|
Long-term debt
|
40,994
|
|
|
41,487
|
|
|
—
|
|
|
41,487
|
|
|
—
|
|
|
Accrued interest payable
|
—
|
|
|
705
|
|
|
—
|
|
|
705
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
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
|
|
|
—
|
|
|
Three Months Ended
|
|||||||||||
|
March 31
|
|
June 30
|
|
Sep. 30
|
|
Dec. 31
|
|||||
2019
|
|
|
|
|
|
|
|
|||||
Interest income
|
$
|
16,113
|
|
|
16,328
|
|
|
16,329
|
|
|
16,424
|
|
Interest expense
|
2,722
|
|
|
2,738
|
|
|
2,751
|
|
|
2,577
|
|
|
Net interest income
|
13,391
|
|
|
13,590
|
|
|
13,578
|
|
|
13,847
|
|
|
Provision for loan losses
|
(105
|
)
|
|
54
|
|
|
264
|
|
|
(6
|
)
|
|
Net interest income after provision
|
13,496
|
|
|
13,536
|
|
|
13,314
|
|
|
13,853
|
|
|
Total non-interest income
|
2,772
|
|
|
2,998
|
|
|
3,356
|
|
|
3,222
|
|
|
Total non-interest expenses
|
10,700
|
|
|
10,833
|
|
|
10,982
|
|
|
11,007
|
|
|
Income before income taxes
|
5,568
|
|
|
5,701
|
|
|
5,688
|
|
|
6,068
|
|
|
Provision for income taxes
|
941
|
|
|
973
|
|
|
961
|
|
|
1,238
|
|
|
Net income
|
$
|
4,627
|
|
|
4,728
|
|
|
4,727
|
|
|
4,830
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.35
|
|
|
0.36
|
|
|
0.36
|
|
|
0.37
|
|
Diluted
|
0.35
|
|
|
0.36
|
|
|
0.36
|
|
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
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
|
|
Condensed Balance Sheets:
|
|
|
|
|||
December 31,
|
2019
|
|
2018
|
|||
Assets:
|
|
|
|
|||
Cash on deposit with subsidiary
|
$
|
3,252
|
|
|
715
|
|
Cash on deposit with unrelated depository institution
|
23
|
|
|
—
|
|
|
Equity securities, at fair value
|
971
|
|
|
816
|
|
|
Investment in subsidiaries
|
223,735
|
|
|
216,830
|
|
|
Other assets
|
84
|
|
|
624
|
|
|
Total assets
|
$
|
228,065
|
|
|
218,985
|
|
|
|
|
|
|||
Liabilities
|
$
|
17
|
|
|
—
|
|
|
|
|
|
|||
Shareholders' equity
|
228,048
|
|
|
218,985
|
|
|
Total liabilities and shareholders' equity
|
$
|
228,065
|
|
|
218,985
|
|
Condensed Statements of Income
|
|
|
|
|
|
||||
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||
Income:
|
|
|
|
|
|
||||
Dividends from subsidiaries
|
$
|
18,300
|
|
|
10,383
|
|
|
6,800
|
|
Interest and dividends
|
31
|
|
|
35
|
|
|
36
|
|
|
Net gain on sales of securities
|
—
|
|
|
—
|
|
|
14
|
|
|
Other income
|
215
|
|
|
(66
|
)
|
|
—
|
|
|
Total income
|
18,546
|
|
|
10,352
|
|
|
6,850
|
|
|
|
|
|
|
|
|
||||
Total expenses
|
1,369
|
|
|
1,668
|
|
|
1,290
|
|
|
|
|
|
|
|
|
||||
Income before income tax expense/benefit and equity in undistributed income of subsidiaries
|
17,177
|
|
|
8,684
|
|
|
5,560
|
|
|
Income tax benefit
|
222
|
|
|
341
|
|
|
380
|
|
|
Equity in undistributed income of subsidiaries
|
1,513
|
|
|
5,820
|
|
|
7,032
|
|
|
Net income
|
$
|
18,912
|
|
|
14,845
|
|
|
12,972
|
|
Condensed Statements of Cash Flows
|
|
|
|
|
|
||||
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||||
Net income
|
$
|
18,912
|
|
|
14,845
|
|
|
12,972
|
|
Adjustments for non-cash items -
|
|
|
|
|
|
|
|
|
|
Increase in undistributed income of subsidiaries
|
(1,513
|
)
|
|
(5,820
|
)
|
|
(7,032
|
)
|
|
Other, net
|
476
|
|
|
(383
|
)
|
|
84
|
|
|
Net cash flows provided by operating activities
|
17,875
|
|
|
8,642
|
|
|
6,024
|
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of equity securities
|
(337
|
)
|
|
(90
|
)
|
|
(54
|
)
|
|
Proceeds from sales of equity securities
|
397
|
|
|
107
|
|
|
93
|
|
|
Investments in subsidiaries
|
—
|
|
|
—
|
|
|
(250
|
)
|
|
Cash paid for business acquisition, net of cash received
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
Net cash flows provided by (used in) investing activities
|
60
|
|
|
(251
|
)
|
|
(211
|
)
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
446
|
|
|
416
|
|
|
360
|
|
|
Payments to repurchase common stock
|
(6,834
|
)
|
|
(348
|
)
|
|
—
|
|
|
Cash dividends paid on common stock
|
(9,028
|
)
|
|
(8,124
|
)
|
|
(6,407
|
)
|
|
Other
|
41
|
|
|
72
|
|
|
51
|
|
|
Net cash flows used in financing activities
|
(15,375
|
)
|
|
(7,984
|
)
|
|
(5,996
|
)
|
|
Net change in cash
|
2,560
|
|
|
407
|
|
|
(183
|
)
|
|
Cash at beginning of year
|
715
|
|
|
308
|
|
|
491
|
|
|
Cash at end of year
|
$
|
3,275
|
|
|
715
|
|
|
308
|
|
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
|
9,904
|
|
|
$
|
11.96
|
|
|
—
|
|
2015 Plan
|
—
|
|
|
—
|
|
|
406,797
|
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
9,904
|
|
|
$
|
11.96
|
|
|
406,797
|
|
(a) Exhibit No.
|
|
|
Exhibit Description
|
2.1
|
|
|
|
2.2
|
|
|
|
2.3
|
|
|
|
2.4
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
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, 2019 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/ Eric J. Meilstrup
|
|
|
Eric J. Meilstrup, President & Chief Executive Officer
|
|
|
March 4, 2020
|
|
/s/ Eric J. Meilstrup
|
|
/s/ Craig M. Johnson
|
|
Eric J. Meilstrup, President, Chief Executive
|
|
Craig M. Johnson, Director
|
|
Officer & Director
|
|
March 4, 2020
|
|
(Principal Executive Officer)
|
|
|
|
March 4, 2020
|
|
|
|
|
|
/s/ Michael J Johrendt
|
|
/s/ Robert C. Haines II
|
|
Michael J. Johrendt, Director
|
|
Robert C. Haines II, Executive Vice President
|
|
March 4, 2020
|
|
& Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
March 4, 2020
|
|
/s/ William H. Kaufman
|
|
|
|
William H. Kaufman, Director
|
|
|
|
March 4, 2020
|
|
/s/ Spencer S. Cropper
|
|
|
|
Spencer S. Cropper
|
|
|
|
Chairman of the Board of Directors
|
|
/s/ John H. Kochensparger III
|
|
March 4, 2020
|
|
John H. Kochensparger III, Director
|
|
|
|
March 4, 2020
|
|
|
|
|
|
/s/ Mary E. Bradford
|
|
|
|
Mary E Bradford, Director
|
|
/s/ Anne E. Krehbiel
|
|
March 4, 2020
|
|
Anne E. Krehbiel, Director
|
|
|
|
March 4, 2020
|
|
|
|
|
|
/s/ Steve P. Foster
|
|
|
|
Steve P. Foster, Director
|
|
/s/ Stephen P. Wilson
|
|
March 4, 2020
|
|
Stephen P. Wilson, Director
|
|
|
|
March 4, 2020
|
|
|
|
|
|
/s/ William G. Huddle
|
|
|
|
William G. Huddle, Director
|
|
|
|
March 4, 2020
|
|
|
|
•
|
any merger or consolidations of LCNB;
|
•
|
any sale, lease, exchange, transfer or other disposition of all, or substantially all, of the assets of LCNB;
|
•
|
the issuance or transfer of any securities of LCNB to any other person or entity in exchange for assets or securities; or
|
•
|
the issuance or transfer of any securities of LCNB, by LCNB, to any other person or entity for cash.
|
•
|
one-fifth or more, but less than one-third, of the voting power;
|
•
|
one-third or more, but less than a majority, of the voting power; or
|
•
|
a majority or more of the voting power.
|
•
|
a majority of the voting power of the corporation represented in person or by proxy at the meeting; and
|
•
|
a majority of the voting power at the meeting exercised by shareholders, excluding:
|
•
|
the acquiring shareholder,
|
•
|
officers of the corporation elected or appointed by the directors of the corporation,
|
•
|
employees of the corporation who are also directors of the corporation, and
|
•
|
persons who acquire specified amounts of shares after the first public disclosure of the proposed control share acquisition.
|
•
|
the sale or acquisition of an interest in assets meeting thresholds specified in the statute;
|
•
|
mergers and similar transactions;
|
•
|
a voluntary dissolution;
|
•
|
the issuance or transfer of shares or any rights to acquire shares having a fair market value at least equal to 5% of the aggregate fair market value of the corporation’s outstanding shares;
|
•
|
a transaction that increases the interested shareholder’s proportionate ownership of the corporation; and
|
•
|
any other benefit that is not shared proportionately by all shareholders.
|
•
|
the transaction is approved by the holders of shares with at least two-thirds of the voting power of the corporation in the election of directors (or a different proportion specified in the corporation’s articles of incorporation), including at least a majority of the outstanding shares after excluding shares controlled by the interested shareholder; or
|
•
|
the business combination results in shareholders, other than the interested shareholder, receiving a “fair market value” for their shares determined by the method described in the statute.
|
/s/ BKD, LLP
|
|
BKD, LLP
|
|
|
|
Cincinnati, Ohio
|
|
March 4, 2020
|
|
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/ Eric J. Meilstrup
|
|
Eric J. Meilstrup
|
|
President & Chief Executive Officer
|
|
March 4, 2020
|
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
|
|
Executive Vice President &
|
|
Chief Financial Officer
|
|
March 4, 2020
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Eric J. Meilstrup
|
|
/s/ Robert C. Haines II
|
|
|
Eric J. Meilstrup
|
|
Robert C. Haines II
|
|
|
President & Chief Executive Officer
|
|
Executive Vice President and
|
|
|
|
|
Chief Financial Officer
|
|