Acquisition

6 Months Ended

Jun. 30, 2023

Business Combinations [Abstract]

Subsequent Event, Pro Forma Business Combinations or Disposals

BUSINESS COMBINATION

LCNB and Cincinnati Bancorp, Inc. (“CNNB”), the holding company for Cincinnati Federal, a federally chartered stock

savings and loan association, signed a definitive merger agreement on May 17, 2023 whereby CNNB will merge with and into LCNB in a stock-and-cash transaction. CNNB operates five full-service branch offices in Cincinnati, Ohio and Northern Kentucky and has approximately $304.7 million in assets, $262.9 million in loans, $223.6 million of deposits, and $40.3 million in consolidated stockholders’ equity as of March 31, 2023. When completed, the transaction will significantly increase LCNB’s existing presence in the Cincinnati market and expand LCNB’s community banking franchise across the Ohio River into the Northern Kentucky market.

Subject to the terms of the merger agreement, which has been approved by the Board of Directors of each company, CNNB shareholders will have the opportunity to elect to receive either 0.9274 shares of LCNB stock or $17.21 per share in cash for each share of CNNB common stock owned, subject to 80% of all CNNB shares being exchanged for LCNB common stock. As of March 31, 2023, CNNB reported 2,884,171 shares of common stock outstanding, as well as 296,350 options with a weighted average strike price of $10.65 per share. Any unexercised stock options of CNNB will be canceled in exchange for a cash payment of $17.21 less the per share exercise price of the option. The transaction consideration is subject to dollar-for-dollar downward adjustment if CNNB’s adjusted shareholders’ equity, as defined in the merger agreement, is less than $36.8 million as measured three business days immediately before the closing date.

At closing, Cincinnati Federal branches will become branches of LCNB National Bank. At that time, LCNB will have 33 banking offices in Ohio and one branch office in Northern Kentucky. Subject to regulatory approval, CNNB shareholder approval, and other customary conditions set forth in the definitive merger agreement, the transaction is anticipated to close in the fourth quarter of 2023. LCNB shareholder approval is not required.