ACQUISITION (Tables)

12 Months Ended

Dec. 31, 2014

Fair Values of Assets Acquired, Liabilities Assumed, and Consideration Paid

The merger with Eaton National was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at their estimated fair values as of the merger date, as summarized in the following table (in thousands):



Consideration Paid:
Cash paid to shareholder	$	24,750

Identifiable Assets Acquired:
Cash and cash equivalents	15,635
Investment securities:
Available-for-sale	35,859
Federal Reserve Bank stock	41
Federal Home Loan Bank stock	784
Loans	115,944
Premises and equipment	1,314
Bank owned life insurance	3,618
Core deposit intangible	2,466
Other real estate owned	262
Other assets	1,624
Total identifiable assets acquired	177,547

Liabilities Assumed:
Deposits	165,335
Short-term borrowings	651
Other liabilities	263
Total liabilities assumed	166,249

Total Identifiable Net Assets Acquired	11,298

Goodwill resulting from merger	$	13,452

The merger with First Capital was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at their estimated fair values as of the merger date, as summarized in the following table (in thousands):



Consideration Paid:
Common shares issued (888,811)	$	12,354
Cash paid to shareholders	7,828
Total value of consideration paid	20,182

Identifiable Assets Acquired:
Cash and cash equivalents	17,632
Investment securities:
Available-for-sale	21,606
Held-to-maturity	384
Federal Reserve Bank stock	157
Federal Home Loan Bank stock	763
Loans	98,904
Premises and equipment	3,949
Bank owned life insurance	3,687
Core deposit intangible	2,574
Other real estate owned	127
Deferred income taxes	185
Other assets	1,380
Total identifiable assets acquired	151,348

Liabilities Assumed:
Deposits	136,823
Long-term debt	1,792
Other liabilities	822
Total liabilities assumed	139,437

Total Identifiable Net Assets Acquired	11,911

Goodwill resulting from merger	$	8,271

Results of Operations are Included in Consolidated Statement of Income from the Date of Merger

The results of operations are included in the consolidated statement of income from the dates of the mergers. The estimated amount of Eaton National's revenue (net interest income plus non-interest income) and net income, excluding merger and data conversion costs, included in LCNB's consolidated statement of income for 2014 were as follows (in thousands):



Total revenue	$	6,608
Net income	2,997

Acquired Entity's Estimated Pro Forma Financial Information

The following table presents unaudited pro forma information as if the merger with Eaton National had occurred on January 1, 2012 (in thousands). This pro forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of the core deposit intangible, and related income tax effects. It does not include merger and data conversion costs. The pro forma information does not necessarily reflect the results of operations that would have occurred had the merger with First Capital occurred in 2012. In particular, expected operational cost savings are not reflected in the pro forma amounts.



	For Years Ended December 31,
	2014		2013	2012
Total revenue	$	44,768	47,183	43,287
Net income	10,275		10,670	10,668
Basic earnings per common share	1.11		1.36	1.28
Diluted earnings per common share	1.09		1.34	1.26