LCNB Corp. Reports Financial Results for the Three and Six Months Ended June 30, 2011

LCNB Corp. (LCNB) (OTCBB:LCNB) today announced net income available to common shareholders of $1,992,000 (total basic and diluted earnings per common share of $0.30) and $4,294,000 (total basic and diluted earnings per common share of $0.64) for the three and six months ended June 30, 2011, respectively. This compares to $2,752,000 (total basic and diluted earnings per common share of $0.41) and $4,964,000 (total basic and diluted earnings per common share of $0.74) for the same three and six-month periods in 2010.

In late 2010, LCNB’s board of directors resolved to sell its insurance agency subsidiary, Dakin Insurance Agency, Inc., and, therefore, the subsidiary's financial results are reported in the income statement as income from discontinued operations, net of taxes. Net income for the six months ended June 30, 2011 includes income from discontinued operations, net of taxes of $793,000, which is a $655,000 increase from the same period in 2010. This increase was caused by the sale of LCNB’s insurance agency subsidiary during the first quarter 2011 and reflects the gain recognized on the sale less certain related closing costs, taxes, and a curtailment expense recognized in LCNB’s nonqualified defined benefit retirement plan due to the sale.

Net income from continuing operations for the three and six months ended June 30, 2011 was $2,023,000 and $3,501,000, respectively. This compares to $2,685,000 and $4,826,000 for the comparable periods in 2010.

Net loan charge-offs for the first six months of 2011 and 2010 totaled $420,000 and $567,000, respectively. Non-accrual loans and loans past due 90 days or more and still accruing interest totaled $3,756,000 or 0.82% of total loans at June 30, 2011, compared to $4,061,000 or 0.89% of total loans at December 31, 2010. The decrease was primarily due to the receipt of a guarantee payment on a Small Business Administration loan that had been classified as non-accrual at December 31, 2010. Other real estate owned (which includes property acquired through foreclosure or deed-in-lieu of foreclosure and also includes property deemed to be in-substance foreclosed) and other repossessed assets totaled approximately $2,226,000 at June 30, 2011 and $2,114,000 at December 31, 2010. The increase was primarily due to inventory repossessed from a commercial borrower that ceased operations.

Net interest income for the three months ended June 30, 2011 increased $5,000 over the comparative period in 2010. Net interest income for the six months ended June 30, 2011 decreased $77,000 over the comparative period in 2010, primarily due to a reduction in general market rates. Non-interest income for the three and six-month periods in 2011 were $658,000 and $480,000, respectively, less than the comparative periods in 2010 primarily due to the absence of death benefits received from bank owned life insurance during the second quarter 2010.

Non-interest expense for the three and six months ended June 30, 2011 increased $110,000 and $704,000, respectively, from the comparative periods in 2010 primarily due to increases in salaries and employee benefits.

LCNB Corp. is a financial holding company headquartered in Lebanon, Ohio. LCNB Corp.’s only business is ownership of LCNB National Bank, which has 26 offices located in Warren, Butler, Montgomery, Clinton, Clermont, and Hamilton Counties, Ohio. Additional information about LCNB Corp. and information about products and services offered by LCNB National Bank can be found on the Internet at www.LCNB.com.

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 disclaims any intent or obligation to update such forward-looking statements. LCNB intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.