UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 2000
Commission file number 000-26121
LCNB Corp.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 31-1626393
- -------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2 North Broadway, Lebanon, Ohio 45036
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(513) 932-1414
---------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
The number of shares outstanding of the issuer's common stock, without par
value, as of April 28, 2000, was 1,775,942 shares.
<PAGE>
LCNB Corp.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 2000, and December 31, 1999 . . . . . . . . . 1
Consolidated Statements of Income -
Three Months Ended March 31, 2000
and 1999. . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Comprehensive
Income and Changes in Shareholders' Equity -
Three Months Ended March 31, 2000 and the
Year Ended December 31, 1999. . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2000 and 1999. . . . . . . 4
Notes to Consolidated Financial Statements . . . . . . . 5-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . 7-12
Item 3. Quantitative and Qualitative Disclosures
about Market Risks. . . . . . . . . . . . . . . . . . . 12
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 13
Item 2. Changes in Securities and Use of Proceeds . . . . . . . . 13
Item 3. Defaults by the Company on its Senior Securities. . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders . . . 13
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 13
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
<TABLE>
LCNB Corp. and Subsidiary
Consolidated Balance Sheets
(thousands)
<CAPTION>
March 31, December 31,
2000 1999
(unaudited) (a)
<S> <C> <C>
ASSETS:
Cash and due from banks $ 14,807 18,694
Federal funds sold 2,700 5,300
------- -------
Total cash and cash equivalents 17,507 23,994
Interest-bearing deposits in banks 5,492 5,492
Federal Reserve Bank stock 647 647
Securities available for sale, at
market value 100,621 104,911
Loans 295,966 287,608
Less-allowance for loan losses 2,000 2,000
------- -------
Net loans 293,966 285,608
Premises and equipment, net 8,668 8,228
Accrued income receivable 3,102 3,363
Intangible assets 4,555 4,710
Other assets 2,383 2,026
------ -------
TOTAL ASSETS $436,941 438,979
======= =======
LIABILITIES:
Deposits-
Noninterest-bearing $ 54,413 49,552
Interest-bearing 336,107 342,092
------- -------
Total deposits 390,520 391,644
Accrued interest and other liabilities 2,916 4,348
------- -------
TOTAL LIABILITIES 393,436 395,992
------- -------
SHAREHOLDERS' EQUITY:
Common stock-no par value, authorized
4,000,000 shares; issued and outstanding
1,760,000 shares 10,560 10,560
Surplus 11,000 11,000
Retained earnings 23,391 22,725
Accumulated other comprehensive
(loss) income, net of taxes (1,446) (1,298)
------- -------
TOTAL SHAREHOLDERS' EQUITY 43,505 42,987
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $436,941 438,979
======= =======
<FN>
(a) Financial information as of December 31, 1999 has been derived from
the audited, consolidated financial statements of the Registrant.
</FN>
The accompanying notes to financial statements are an integral part of these
statements.
</TABLE>
-1-
<PAGE>
<TABLE>
LCNB Corp. and Subsidiary
Consolidated Statements of Income
(In thousands except per share data)
(unaudited)
<CAPTION>
Three Months Ended
March 31,
-----------------------
2000 1999
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 6,179 5,487
Interest on federal funds sold 70 108
Interest on deposits in banks 70 69
Interest on investment securities-
Taxable 1,020 1,251
Non-taxable 395 339
----- -----
TOTAL INTEREST INCOME 7,734 7,254
----- -----
INTEREST EXPENSE:
Interest on deposits 3,635 3,234
Interest on short-term borrowings 18 8
----- -----
TOTAL INTEREST EXPENSE 3,653 3,242
----- -----
NET INTEREST INCOME 4,081 4,012
PROVISION FOR LOAN LOSSES 34 46
----- -----
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,047 3,966
----- -----
NON-INTEREST INCOME:
Trust income 275 215
Service charges and fees 497 502
Net loss on sale of securities (14) -
Other operating income 28 28
----- -----
TOTAL NON-INTEREST INCOME 786 745
----- -----
NON-INTEREST EXPENSE:
Salaries and wages 1,301 1,200
Pension and other employee benefits 373 356
Equipment 125 120
Occupancy, net 248 254
State franchise tax 125 153
Marketing 105 104
Intangible amortization 161 151
Other 760 695
----- -----
TOTAL NON-INTEREST EXPENSE 3,198 3,033
----- -----
INCOME BEFORE INCOME TAXES 1,635 1,678
PROVISION FOR INCOME TAXES 441 505
----- -----
NET INCOME $ 1,194 1,173
===== =====
Basic earnings per common share $ .68 .67
Average shares outstanding (000's) 1,760 1,760
The accompanying notes to financial statements are an integral part of these
statements.
</TABLE>
-2-
<PAGE>
<TABLE>
LCNB Corp. and Subsidiary
Consolidated Statements of Comprehensive Income
and Changes in Shareholders' Equity
(thousands)
(unaudited)
<CAPTION>
Accumulated
Other Total
Common Retained Comprehensive Shareholders' Comprehensive
Shares Surplus Earnings Income Equity Income
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1999 $10,560 11,000 19,993 646 42,199
Comprehensive Income:
Net income 5,548 5,548 $5,548
Net unrealized loss on
available-for-sale securities
(net of taxes of $995) (1,931) (1,931) (1,931)
Reclassification adjustment for
net realized gain on sale of
available-for-sale securities
included in net income (net of
taxes of $7) (13) (13) (13)
-----
Total comprehensive income $3,604
=====
Cash dividends declared
($1.40 per share) (2,816) (2,816)
------ ------ ------ ----- ------
Balance December 31, 1999 $10,560 11,000 22,725 (1,298) 42,987
Comprehensive Income:
Net income 1,194 1,194 $1,194
Net unrealized loss on
available-for-sale securities
(net of tax benefit of $81) (157) (157) (157)
Reclassification adjustment for
net realized loss on sale of
available-for-sale securities
included in net income (net of
tax benefit of $5) 9 9 9
-----
Total comprehensive income $1,046
=====
Cash dividends declared
($.30 per share) (528) (528)
------ ------ ------ ------ ------
Balance March 31, 2000 $10,560 11,000 23,391 (1,446) 43,505
====== ====== ====== ====== ======
The accompanying notes to financial statements are an integral part of these
statements.
</TABLE>
-3-
<PAGE>
<TABLE>
LCNB Corp. and Subsidiary
Consolidated Statements of Cash Flows
(thousands)
(unaudited)
<CAPTION>
Three Months Ended
March 31,
----------------------
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,194 1,173
Adjustments for non-cash items -
Depreciation and amortization 481 441
Provision for loan losses 34 46
Deferred taxes provision (benefit) (48) 115
Realized loss on sales of securities 14 -
Origination of mortgage loans for sale - (1,194)
Proceeds from sales of mortgage loans - 1,194
(Increase) decrease in income receivable 261 (79)
(Decrease) in interest payable and other
accrued expenses, net (136) (592)
------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,800 1,104
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities available
for sale 7,181 19,160
Proceeds from sales of securities available for sale 1,987 112
Purchases of securities available for sale (5,209) (14,440)
Net (increase) decrease in loans (8,521) 3,289
Purchases of premises and equipment (614) (149)
------ ------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (5,176) 7,972
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) in deposits (1,124) (4,642)
Net (decrease) in short-term borrowings (1,459) (233)
Cash dividends paid (528) (440)
------ ------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (3,111) (5,315)
------ ------
NET CHANGE IN CASH AND CASH EQUIVALENTS (6,487) 3,761
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23,994 20,707
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $17,507 24,468
====== ======
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 3,610 3,335
Income taxes paid - 169
The accompanying notes to financial statements are an integral part of these
statements.
</TABLE>
-4-
<PAGE>
LCNB Corp. and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
Effective May 18, 1999, Lebanon Citizens National Bank ("Lebanon Citizens"),
was reorganized into a one-bank holding company structure. Substantially all
of the assets, liabilities and operations of LCNB Corp., the new consolidated
holding company, are attributable to its wholly-owned subsidiary, Lebanon
Citizens. The accompanying unaudited consolidated financial statements
include the accounts of LCNB Corp. and Lebanon Citizens. The financial
information prior to the reorganization consists of Lebanon Citizens.
The statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions
to Form 10-Q. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the unaudited
consolidated financial statements include all adjustments (consisting of
normal, recurring accruals) considered necessary for a fair presentation of
financial position, results of operations and cash flows for the interim
periods.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the full year ending
December 31, 2000. These unaudited consolidated financial statements should
be read in conjunction with the consolidated financial statements, accounting
policies and financial notes thereto included in LCNB Corp.'s 1999 Form 10-K
filed with the Commission.
NOTE 2 - EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income by the weighted
average number of common shares outstanding during the period. LCNB Corp.'s
capital structure includes no potential for dilution. There are no warrants,
options or other arrangements that would increase the number of shares
outstanding.
NOTE 3 - OTHER DEVELOPMENTS
On April 11, 2000 Dakin Insurance Agency, Inc. was acquired and became a
wholly-owned subsidiary of LCNB Corp. Under the terms of the agreement,
Dakin shareholders received 15,942 shares of LCNB Corp. common stock in a
Private offering The transaction qualifies as a tax-free reorganization
and will be accounted for using the pooling method of accounting.
-5-
<PAGE>
NOTE 3 - OTHER DEVELOPMENTS (continued)
The ability to complete this transaction is a result of the passage by
Congress of the Graham, Leach, Bliley (GLB) Act, which became effective
March 12, 2000. The GLB Act permits bank holding companies and national
banks to own many types of non-banking subsidiaries such as insurance
agencies and securities brokerage firms. The GLB Act allows a bank holding
company to become a financial holding company and to make non-bank
acquisitions. On February 4, 2000, LCNB filed a notice of election to
become a financial holding company pursuant to the GLB Act, which
election was approved by the Board of Governors of the Federal Reserve
System on March 13, 2000 and effective April 11, 2000.
-6-
<PAGE>
LCNB Corp. and Subsidiary
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
COMPARATIVE FINANCIAL INFORMATION
Effective May 18, 1999, Lebanon Citizens was reorganized into a one-bank
holding company structure. Prior to that date, the financial information
presented represents the assets, liabilities and operations of Lebanon
Citizens. Comparative earnings per share information is presented on a
pro forma basis.
FORWARD-LOOKING STATEMENTS
Certain matters disclosed herein may be deemed to be forward-looking
statements that involve risks and uncertainties, including regulatory policy
changes, interest rate fluctuations, loan demand, loan delinquencies and
losses, and other risks. Actual strategies and results in future time periods
may differ materially from those currently expected. Such forward-looking
statements represent management's judgment as of the current date. LCNB Corp.
disclaims, however, any intent or obligation to update such forward-looking
statements.
RESULTS OF OPERATIONS
LCNB Corp. earned $1.194 million for the three months ended March 31, 2000
compared to $1.173 million for the three months ended March 31, 1999.
Earnings per share were $.68 for the first quarter of 2000, up 1% from the
$.67 per share earned in the first quarter of 2000. Annualized performance
ratios included a return on average assets of 1.10% and a return on average
equity of 11.02%, compared with the same ratios for the first quarter of 1999
of 1.12% and 11.09%, respectively.
NET INTEREST INCOME
The table below presents net interest income, average balances and average
rates.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
<S> <C> <C>
NET INTEREST INCOME (in thousands)
Book basis $ 4,081 4,012
Tax equivalent adjustment 134 130
----- -----
Fully taxable basis $ 4,215 4,142
===== =====
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
<S> <C> <C>
AVERAGE BALANCES (in thousands)
Interest-earning assets $404,198 396,409
Interest-bearing liabilities 339,391 333,909
------- -------
Earning assets financed by
noninterest-bearing funds $ 64,807 62,500
======= =======
AVERAGE RATES (fully taxable basis)
Yield on interest-earning assets 7.83% 7.47%
Cost of interest-bearing liabilities 4.33 3.89
---- ----
Interest rate spread 3.50 3.58
Contribution of noninterest-bearing
funds .69 .61
---- ----
Net interest margin 4.19% 4.19%
==== ====
</TABLE>
Net interest income on a fully taxable basis for the first quarter of 2000
totaled $4.215 million, up $73 thousand, or 2%, from the first quarter of
1999. The $73 thousand increase in net interest income was primarily due
to a $7.8 million increase in average earning assets partially offset by
a $6.0 million increase in average interest bearing liabilities.
The net interest margin of 4.19% in the first quarter of 2000 equaled the
net interest margin for the first quarter of 1999. The yield on interest
earning assets increased 36 basis points as a result of the increase in
higher yielding assets, primarily commercial and real estate loans, as well
as the general increase in market interest rates. The cost of average
interest-bearing liabilities increased 44 basis points due to the general
increase in market interest rates.
Average interest-earning assets totaled $404.2 million for the first quarter
of 2000, up $7.8 million from the same period in 1999. The increase was
primarily attributable to increases in the commercial, real estate and
installment loan portfolios. Average interest-bearing liabilities totaled
$339.3 million for the first quarter of 2000, up $5.5 million from the same
period in 1999.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The total provision for loan losses is determined based upon management's
evaluation as to the amount needed to maintain the allowance for credit losses
at a level considered appropriate in relation to the risk of losses inherent
in the portfolio. The total loan loss provision and the other changes in the
allowance for loan losses are shown below.
-8-
<PAGE>
<TABLE>
<CAPTION>
Quarter Ended
March 31,
2000 1999
(thousands)
<S> <C> <C>
Balance, beginning of period $ 2,000 2,000
Charge-offs 48 52
Recoveries 14 6
----- -----
Net charge-offs 34 46
----- -----
Provision for loan losses 34 46
----- -----
Balance, end of period $ 2,000 2,000
===== =====
</TABLE>
The following table sets forth information regarding the past-due, non-accrual
and renegotiated loans of Lebanon Citizens at the dates indicated:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------- ----------
(thousands)
<S> <C> <C>
Loans accounted for on
non-accrual basis $ - -
Accruing loans which are
past due 90 days or more 341 68
Renegotiated loans 0 -
--- --
Total $ 341 68
=== ==
</TABLE>
The increase in accruing loans which are past due 90 days or more is due
to a $272 thousand commercial loan which has financially strong guarantors
supporting the credit. It is anticipated the borrowers will pay the loan
off in the second quarter of 2000.
NON-INTEREST INCOME
Non-interest income of $786 thousand increased $41 thousand, or 5.5% in the
first quarter of 2000 compared to the first quarter of 1999. Trust income
of $275 thousand increased $60 thousand, or 27.9%, from the first quarter of
1999 due to an increase in the market value of assets under management on
which fees are based. Service charges and fees decreased $5 thousand due
to a $69 thousand reduction in merchant credit card processing fees resulting
from the exiting of the business in the fourth quarter of 1999. This decline
was substantially offset by increases in bank card-related fee income and
deposit account-related fees.
-9-
<PAGE>
NON-INTEREST EXPENSE
Total non-interest expense increased $165 thousand, or 5.4%, in the first
quarter 2000 compared with the first quarter 1999. The increase was due
primarily to labor costs, including pension and other benefits, relating
to salary increases. Other expenses increased as a result of the public
filings required by the newly formed LCNB Corp. as well as acquisition
efforts in the Dakin Insurance Company transaction. Additionally, other
expenses increased as a result of incremental telecommunication charges
related to upgrading of the branch communication system.
FINANCIAL CONDITION
The following table highlights the changes in the balance sheet. The
analysis uses quarterly averages to give a better indication of balance
sheet trends.
<TABLE>
<CAPTION>
CONDENSED AVERAGE BALANCE SHEETS
(thousands)
For the quarter ended:
March 31, December 31, September 30,
2000 1999 1999
<S> <C> <C> <C>
ASSETS
Interest-earning:
Interest-bearing deposits with banks $ 5,492 5,492 5,492
Federal funds sold 5,023 12,647 6,550
Securities available for sale 103,515 106,406 113,475
Loans 290,168 283,647 277,658
------- ------- -------
Total interest-earning assets 404,198 408,192 403,175
------- ------- -------
Noninterest-earning:
Cash and due from banks 15,217 15,655 15,154
All other assets 18,467 17,419 17,448
Allowance for credit losses (2,002) (2,006) (2,003)
------- ------- -------
Total assets $435,880 439,260 433,774
======= ======= =======
LIABILITIES
Interest bearing:
Interest-bearing deposits $338,341 341,935 339,048
Short-term borrowings 1,050 1,078 1,072
------- ------- -------
Total interest-bearing liabilities 339,391 343,013 340,120
Noninterest-bearing:
Noninterest-bearing deposits 51,472 50,529 49,261
All other liabilities 1,789 1,558 1,274
------- ------- -------
Total liabilities 392,652 395,100 390,655
SHAREHOLDERS' EQUITY 43,228 44,160 43,119
------- ------- -------
Total liabilities and
shareholders' equity $435,880 439,260 433,774
======= ======= =======
</TABLE>
-10-
<PAGE>
Total average assets decreased $3.4 million in the first quarter of 2000 from
the fourth quarter 1999. Although total average assets declined, average
loans increased $6.5 million primarily due to continued growth in the real
estate and indirect installment loan portfolios, as well as the commercial
loan portfolio. Total average assets increased $1.3 million in the first
quarter 2000 as compared to the third quarter 1999. Average loans
outstanding, primarily real estate, commercial and indirect installment,
grew by $15.5 million and investments declined by $10.0 million as LCNB Corp.
continued to shift assets into the higher yielding loan portfolio. Average
interest-bearing liabilities decreased $3.6 million from the fourth quarter of
1999. Average noninterest-bearing deposits remained relatively stable in the
first quarter of 2000 when compared to the fourth quarter of 1999 but
increased $2.2 million from the third quarter of 1999.
REGULATORY CAPITAL
Lebanon Citizens and LCNB Corp. are required by regulators to meet certain
minimum levels of capital adequacy. These are expressed in the form of
certain ratios. Capital is separated into Tier I capital (essentially
shareholders'equity less goodwill and other intangibles) and Tier II capital
(essentially the allowance for loan losses limited to 1.25% of risk-weighted
assets). The first two ratios, which are based on the degree of credit risk
in Lebanon Citizens' assets, provide for weighting assets based on assigned
risk factors and include off-balance sheet items such as loan commitments
and stand-by letters of credit. The ratio of Tier I capital to risk-weighted
assets must be at least 4.0% and the ratio of Total capital (Tier 1 capital
plus Tier 2 capital) to risk-weighted assets must be at least 8.0%. The
capital leverage ratio supplements the risk-based capital guidelines. Banks
and holding companies are required to maintain a minimum ratio of Tier 1
capital to adjusted quarterly average total assets of 3.0%. A summary of the
regulatory capital and capital ratios of LCNB Corp. follows:
<TABLE>
<CAPTION>
At At
March 31, December 31,
2000 1999
<S> <C> <C>
Regulatory Capital:
Shareholders' equity $ 43,505 42,987
Goodwill and other intangibles (4,555) (4,710)
Net unrealized securities losses 1,446 1,298
------ ------
Tier 1 risk-based capital 40,396 39,575
Eligible allowance for loan losses 2,000 2,000
------ ------
Total risk-based capital $ 42,396 41,575
====== ======
Capital Ratios:
Total risk-based 15.8% 15.3%
Tier 1 risk-based 15.1% 14.6%
Leverage 9.4% 9.1%
</TABLE>
-11-
<PAGE>
LIQUIDITY
Liquidity is the ability to have funds available at all times to meet the
commitments of Lebanon Citizens. Asset liquidity is provided by cash and
assets which are readily marketable or pledgeable or which will mature in the
near future. Liquid assets included cash and deposits in banks, federal funds
sold and securities available for sale. Liquidity is also provided by access
to core funding sources, primarily core depositors in the bank's trade area.
Lebanon Citizens does not solicit brokered deposits as a funding source. The
liquidity of Lebanon Citizens is enhanced by the fact that 87% of total
deposits at March 31, 2000 were core deposits. Core deposits, for this
purpose, are defined as total deposits less public funds and certificates
of deposit greater than $100,000.
At March 31, 2000, Lebanon Citizens liquid assets amounted to $124 million
or 28% of total gross assets, down from $134 million or 31% at December 31,
1999. Secondary sources of liquidity include Lebanon Citizens' ability to
sell loan participations and purchase federal funds. Management closely
monitors the level of liquid assets available to meet ongoing funding needs.
It is management's intent to maintain adequate liquidity so that sufficient
funds are readily available at a reasonable cost. Loans to deposits were
76% and 73%, at March 31, 2000 and December 31, 1999, respectively. Lebanon
Citizens experienced no liquidity or operational problems as a result of the
current liquidity levels.
YEAR 2000 COMPLIANCE
LCNB Corp. experienced no difficulties resulting from Y2K in the date
transition at year-end 1999 nor were any difficulties encountered within
the first quarter of 2000. Lebanon Citizens' testing and preparation for
Y2K included future dates beyond December 31, 1999. Management anticipates
no difficulties from future date changes.
Item 3. Quantitative and Qualitative Disclosures about Market Risks
QUANTITATIVE AND QUALITATIVE DISLCOSURES ABOUT MARKET RISKS
For a discussion of Lebanon Citizens' asset and liability management
policies and gap analysis for the year ended December 31, 1999 see Item 7A,
Quantitative and Qualitative Disclosures about Market Risks in the LCNB Corp.
1999 Form 10-K. There have been no material changes in Lebanon Citizens'
market risks, which for Lebanon Citizens is primarily interest rate risk.
-12-
<PAGE>
PART II. OTHER INFORMATION
LCNB Corp. and Subsidiary
Item 1. Legal Proceedings - Not Applicable
Item 2. Changes in Securities and Use of Proceeds - Not Applicable
Item 3. Defaults by the Company on its Senior Securities - Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable
Item 5. Other Information - Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
<C> <S>
2 Agreement and Plan of Merger by and among
Dakin Insurance Agency, Inc. shareholders of
Dakin Insurance Agency, Inc., LCNB Corp. and
Dakin Acquisition Corporation dated December 30,
1999. Incorporated herein by reference to the
LCNB Corp. 1999 Form 10-K filed February 23,
2000.
27 Financial Data Schedule for the Three Months
Ended March 31, 2000.
</TABLE>
(b.) There were two reports on Form 8-K filed with the SEC in 2000. A
Form 8-K was filed on January 6, 2000 regarding the press release
reporting the Company's earnings for the year 1999. Another
Form 8-K was filed on April 14, 2000 regarding the consummation of
the merger with Dakin Insurance Agency, Inc. The press release
announced the acquisition and the approval by the Board of Governors
of the Federal Reserve System of LCNB Corp.'s filing to become a
financial holding company pursuant to the Gramm-Leach-Bliley Act.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LCNB Corp.
Registrant
Date: April 28, 2000 /s/Steve P. Foster
--------------------
Steve P. Foster
Executive Vice President
and Chief Financial Officer
-14-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT FOR LCNB CORP. ON FORM 10-Q FOR THE QUARTER ENDED
MARCH 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 14,807
<INT-BEARING-DEPOSITS> 5,492
<FED-FUNDS-SOLD> 2,700
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 100,621
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0
0
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</TABLE>
