The Bank Slate


LCNB entering northern Ky. with Cincinnati Bancorp purchase

LCNB Corp. in Lebanon, Ohio, has agreed to buy Cincinnati Bancorp in Cincinnati.

The $1.9 billion LCNB said in a press release that it will pay $43.7 million in cash and stock for the $305 million-asset Cincinnati Bancorp. The deal, which is expected to close in the fourth quarter, values Cincinnati Bancorp at 108.9% of its tangible book value.

The consideration could be lowered if Cincinnati Bancorp’s adjusted shareholders’ equity falls below $36.8 million three business days prior to closing. The company’s shareholders’ equity was $40.3 million on March 31.

Cincinnati Bancorp has five branches, $263 million of loans and $224 million of deposits. The deal will allow LCNB to enter the northern Kentucky market.

“The combining of our two institutions will provide more benefits, financial products and opportunities for CNNB customers, and create the premier community banking institution in the Cincinnati/northern Kentucky market,” Eric Meilstrup, LCNB’s president and CEO, said in the release.

“We believe that the Cincinnati market is one of the most-attractive markets in the Midwest, and this transaction should enhance LCNB’s long-term profitability metrics and earnings growth rate,” Meilstrup added.

Robert Bedinghaus, Cincinnati Bancorp’s chairman and CEO, and Gregory Meyers, chief lending officer, will join LCNB in consulting capacities. Bedinghaus will also join LCNB’s board.

LCNB said it expects the transaction to be about 18.2% accretive to its 2024 earnings per share and 26.2% accretive the next year, excluding one-time transaction costs. It should take a little over two years for LCNB to earn back an estimated 6.6% dilution to its tangible book value.

LCNB plans to cut about 40% of Cincinnati Bancorp’s annual noninterest expenses. The company expects to incur $9.2 million of merger-related charges, including $1.6 million tied to restructuring the balance sheet.

LCNB was advised by Janney Montgomery Scott and Dinsmore & Shohl. Cincinnati Bancorp was advised by Piper Sandler and Luse Gorman.

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