LCNB CORP
For the period ended Dec 31, 2024. Filed Mar 12, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 12, 2025
LCNB$19.59+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-15.
0001074902-24-000060
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-12.
0001437749-25-007283
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 61 current paragraphs.
37 unchanged; 16 reworded; 7 added; 42 removed; 26 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Net charge-offs for 2024, 2023, and 2022 totaled $741,000, $185,000, and $110,000, respectively. Charge-offs during 2024 were greater because of a $589,000 charge-off on a commercial & industrial loan.
Current report
NM - Not Meaningful
Current report
LCNB's loan portfolio represents its largest asset category and is its most significant source of interest income. Loan classifications have been identified as Commercial & Industrial, Commercial Real Estate, Residential Real Estate, Consumer, Agricultural, and Other. Commercial real estate is the largest classification in LCNB's loan portfolio, comprising about 64.6% of total loans at December 31, 2024.
Current report
Loans secured by commercial real estate consist of owner-occupied, non-owner-occupied, farmland, multi-family, and construction loans. A commercial real estate, owner-occupied loan finances the purchase, construction, or refinance of a building or other property for which the repayment of principal is dependent upon cash flows from ongoing operations conducted by the party, or an affiliate of the party, who owns the property. A commercial real estate, non-owner occupied loan finances the purchase, construction or refinance of a building or other property for which the repayment of principal is dependent upon rental income associated with the property or the subsequent sale of the property. The values of these loans are primarily impacted by the level of interest rates associated with the debt and to local economic conditions, which dictate occupancy rates and the amount of rent charged. The increase in debt service due to higher interest rates may not be able to be passed on to tenants. As part of the origination process, loan interest rates and occupancy rates are stressed to determine the impact on the borrower’s ability to maintain adequate debt service under different economic conditions. Further, LCNB monitors the concentration in any one industry and has established limits relative to the total of the Bank's tier 1 and tier 2 capital for each category of loan. Credit quality trends are monitored by industry to determine if a change in the risk exposure to a certain industry may warrant a change in underwriting standards.
Current report
The following table provides a breakdown of amortized cost of commercial real estate loans by property-type classification as of December 31, 2024, excluding loans which are junior in lien or covered by collateral secured with varying classes of assets (dollars in thousands):
Current report
Most of LCNB's commercial real estate loans are made within its general market area of Southwest and South-Central Ohio and Northern Kentucky. The following table provides a breakdown of amortized cost of commercial real estate loans by real estate collateral location as of December 31, 2024, excluding loans which are junior in lien or covered by collateral secured with varying classes of assets (dollars in thousands):
Current report
Loans Held-For-Sale. Loans held-for-sale (“LHFS”) represent mortgage loans intended to be sold in the secondary market and other loans that management has an active plan to sell. LHFS are carried at the lower-of-cost-or-fair value as determined on an aggregate basis by type of loan. Any writedowns to fair value upon the transfer of loans to LHFS are reflected in loan charge-offs. Any further decreases are recognized in non-interest income and increases in fair value above the loan cost basis are not recognized until the loans are sold.
Removed paragraphs (42)
Previous report
•Cincinnati Bancorp, Inc. merged with and into LCNB Corp. on November 1, 2023.
Previous report
•Eagle Financial Bancorp, Inc. is expected to merge with and into LCNB Corp. during the second quarter 2024.
Previous report
•Merger related expenses connected with the above two acquisitions totaled $4,656,000 during 2023.
Previous report
•Net interest income in 2023 was $56,349,000, compared to $61,042,000 in 2022 and $57,124,000 in 2021.
Previous report
•The provision for credit losses in 2023 totaled $2,077,000, compared to a provision of $250,000 for 2022 and a recovery of $269,000 for 2021. Included in the provision for credit losses for 2023 was a $1,722,000 provision expense related to loans acquired through the Cincinnati Federal acquisition that were not considered purchased with credit deterioration ("non-PCD loans").
Previous report
•Net gains from sales of loans totaled $697,000 in 2023, $196,000 in 2022, and $852,000 in 2021. Gains were lower in 2022 primarily due to the volume of loans sold.
Previous report
•Other non-interest expense for 2023 was partially offset by a $425,000 gain recognized on the sale of an office building as a result of LCNB's branch consolidation strategy.
Previous report
•Other non-interest expense for 2022 included $471,000 in losses from the sales of two office buildings as a result of LCNB's branch consolidation strategy.
Previous report
•Other non-interest expense for 2022 was partially offset by an $889,000 gain recognized from the sale of other real estate owned.
Previous report
(1)Includes non-accrual loans if any.
Previous report
(2)Income from tax-exempt securities is included in interest income on a taxable-equivalent basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 21%.
Previous report
(3)The net interest spread is the difference between the average rate on total interest-earning assets and interest-bearing liabilities.
Previous report
(4)The net interest margin is the taxable-equivalent net interest income divided by average interest-earning assets.
Previous report
(1)Non-accrual loans, if any, are included in average loan balances.
Previous report
(2)Change in interest income from non-taxable investment securities is computed based on interest income determined on a taxable-equivalent yield basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 21%.
Previous report
The increase in total interest income was due primarily to a $3,105,000 increase in interest income from loans and a $1,359,000 increase in interest income from taxable debt securities. Loan interest increased due to a $51.2 million increase in average loans and to a 7 basis point increase in the average rate earned. The average rate earned includes loan prepayment fees, which increased from $601,000 for 2021 to $1,025,000 for 2022. Interest income from taxable debt securities increased due to a $21.4 million increase in average securities and to a 36 basis point increase in the average rate earned on these securities.
Previous report
•Fiduciary income increased during 2023 primarily due to increases in the fair values of trust and brokerage assets managed, on which fees are based. The increases in fair value are due to the opening of new Wealth Management customer accounts and to an increase in the market values of managed assets. Fiduciary income decreased during 2022 primarily due to decreases in the fair values of trust and brokerage assets managed due to an overall decrease in the market values of equity and debt securities caused by general economic conditions. The decreases in fair value were partially offset by an increase in the number of wealth management accounts.
Previous report
•Service charges and fees on deposit accounts decreased during 2023 primarily due to decreases in most fee categories, including fees received from check cards, ATM usage fees, and deposit account fees in general. Service charges and fees on deposit accounts increased during 2022 primarily due to an increase in the volume of overdraft fees collected and fees recognized in relation to the ICS deposit program, partially offset by an overall decrease in service charges collected on deposit accounts.
Previous report
•Net gains from sales of loans were greater during 2023 and 2021 as compared to 2022 primarily due to the volume of loans sold.
Previous report
•Other operating income increased in 2023 as compared to 2022 primarily because of realized and unrealized net gains on equity securities, reflecting a partial recovery in market values. Other operating income decreased in 2022 as compared to 2021 primarily because LCNB recognized $292,000 in losses on equity securities during 2022 as compared to $142,000 in gains during 2021. In addition, other operating income for 2021 included a one-time Ohio Financial Institutions Tax refund of $508,000.
Previous report
•Salaries and employee benefits were 2.2% greater in 2023 than in 2022 and 3.1% greater in 2022 than in 2021. The increase in 2023 was primarily due to overall wage and benefit increases, a higher number of employees during November and December as a result of the CNNB merger, and a higher amount recognized for 401-K plan matching. These increases were partially offset by decreased pension and health insurance expenses and to a higher amount of personnel expenses deferred during 2023 as a cost of loan originations. The increase in 2022 was primarily due to overall wage and benefit increases, increased compensation expense recognized on restricted stock grants, increased pension expense, and to a higher amount of personnel expenses deferred in 2021 attributable to the high volume of PPP loans originated in that period.
Previous report
•Occupancy expense, net increased during 2023 and 2022 due to a higher amount of maintenance and repair costs on LCNB's properties in general as well as incremental expenses related to the CNNB acquisition in 2023.
Previous report
•State financial institutions tax, which is based on year-end capital levels, decreased during 2023 as compared to 2022 due to reductions in capital caused by treasury share purchases during 2022 and a decrease in the fair value of debt securities during 2022, which was recorded net of taxes as an increase in accumulated other comprehensive loss, a component of capital.
Previous report
•Amortization of intangibles decreased during 2022 as compared to 2021 because the core deposit intangibles from the First Capital Bancshares, Inc. and Eaton National Bank & Trust Co. acquisitions amortized in full during the first quarter of 2022.
Previous report
•FDIC insurance premiums increased in 2023 because of a two basis point increase in the FDIC's initial base deposit insurance assessment rate that took effect at the beginning of 2023.
Previous report
•Other real estate owned, net for 2022 is primarily due to a gain recognized on the sale of foreclosed property, slightly offset by other expenses recognized on such property.
Previous report
•Merger-related expenses reflect costs incurred in connection with the acquisitions of Cincinnati Bancorp, Inc., which closed on November 1, 2023, and Eagle Financial Bancorp, Inc., which is anticipated to close during the second quarter of 2024.
Previous report
•Other non-interest expense decreased during 2023 primarily due to a $425,000 gain recognized on the sale of an office building that was closed as a result of LCNB's office consolidation strategy, which was netted against other non-interest expense for accounting purposes. Other non-interest expense for 2022 included $471,000 in losses from the sales of two closed office buildings.
Previous report
•Debt securities, available-for-sale, decreased due to maturities, paydowns, calls, and decreases in market valuation. There were no security purchases during 2023.
Previous report
•Federal Home Loan Bank stock increased due to the addition of stock previously held by Cincinnati Federal and to the purchase of additional stock to support additional borrowings and loans sold to the FHLB, partially offset by the FHLB's repurchase of excess stock.
Previous report
•Net loans increased due to loans obtained through the merger with CNNB and to organic growth in the loan portfolio. Offsetting the increases were a $2,196,000 increase to the allowance for credit losses on loans due to the adoption of ASC 326, a $493,000 increase to the allowance for purchased credit deteriorated loans obtained in the merger with CNNB, and a $1,722,000 provision for credit losses on non-PCD loans obtained in the merger with CNNB.
Previous report
•Goodwill increased due to additional goodwill recorded as a result of the merger with CNNB.
Previous report
•Core deposit and other intangibles increased due to the additions of a core deposit intangible and mortgage servicing rights obtained in the merger with CNNB.
Previous report
•Bank owned life insurance increased primarily due to additional policies obtained in the merger with CNNB and secondarily due to increases in the cash values of the policies. No new policies were purchased during 2023.
Previous report
•Other assets increased primarily due to current and deferred tax assets recorded as a result of the CNNB merger.
Previous report
•Total deposits increased primarily due to additional deposits obtained as a result of the CNNB merger. Generally, non-interest and interest-bearing demand deposits and savings account balances decreased during the year, while money market accounts and IRA and time certificates increased as depositors sought higher interest rates.
Previous report
•Short-term borrowings and long-term debt increased primarily to support an increase in liquidity and to support growth in the loan portfolio, as the increase in net loans was greater than the increase in deposits. LCNB assumed approximately $56.0 million in short-term borrowings, largely paid off by year-end, and $6.0 million in long-term debt as a result of the merger with CNNB.
Previous report
•Common shares increased primarily because 2,042,598 shares of LCNB common stock valued at
Previous report
$28,576,000 were issued to CNNB shareholders to effectuate the merger.
Previous report
•Treasury shares increased because of the repurchase of 199,913 shares of common stock during 2023, which represents almost 1.8% of shares outstanding at December 31, 2022.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Reworded paragraphs (16)
Previous wording
Net income for 2023 was $12,628,000 (basic and diluted earnings per share of $1.10), compared to $22,128,000 (basic and diluted earnings per share of $1.93) in 2022 and $20,974,000 (basic and diluted earnings per share of $1.66) in 2021.
Current wording
Net income for 2024 was $13,492,000 (basic and diluted earnings per share of $0.97), compared to $12,628,000 (basic and diluted earnings per share of $1.10) in 2023 and $22,128,000 (basic and diluted earnings per share of $1.93) in 2022.
Previous wording
2022 vs. 2021. Net interest income on a fully tax-equivalent basis for 2022 totaled $61,242,000, an increase of $3,888,000 from 2021. The increase resulted from an increase in total taxable-equivalent interest income of $4,546,000, partially offset by an increase in total interest expense of $658,000.
Current wording
2024 vs. 2023. Net interest income on a fully tax-equivalent basis for 2024 totaled $60,956,000, an increase of $4,424,000 from 2023. The increase resulted from an increase in total taxable-equivalent interest income of $25,394,000, which was partially offset by an increase in total interest expense of $20,970,000.
Previous wording
The increase in total interest expense was primarily due to an $816,000 increase in interest paid on NOW and money market deposits, a $410,000 increase in interest paid on short-term borrowings, and a $144,000 increase in interest paid on long-term debt, partially offset by a $731,000 decrease in interest paid on IRA and time certificates. Interest paid on NOW and money market deposits increased due to a $53.3 million increase in average balances and to a 15 basis point increase in the average rate paid. Interest paid on IRA and time certificates decreased due to a $42.2 million decrease in average deposit balances and to a 15 basis point decrease in the average rate paid. Interest paid on short-term borrowings increased due to a $13.7 million increase in average balances and to a 214 basis point increase in the average rate paid. Interest paid on long-term debt increased due to a $1.8 million increase in average balances and to a 52 basis point increase in the average rate paid.
Current wording
The increase in total interest expense was primarily due to a $13,937,000 increase in interest paid on IRA and time certificates due to a $247.9 million increase in average balances and to a 113 basis point increase in the average rate paid. Interest paid on interest-bearing demand and money market deposit accounts increased due to a $71.3 million increase in average deposit balances and to a 66 basis point increase in the average rate paid. Interest paid on long-term debt increased due to a $99.9 million increase in average balances and to a 3 basis point increase in the average rate paid.
Previous wording
The increased rates paid on interest-bearing liabilities and the increased yield earned on interest-earning assets is largely the result of higher market interest rates that were caused by FOMC increases in the Targeted Federal Funds rate. The Targeted Federal Funds rate increased by 425 basis points during 2022 and by an additional 100 basis points during 2023.
Current wording
The increased rates paid on interest-bearing liabilities and the increased yield earned on interest-earning assets is largely the result of fluctuations in market rates.
Previous wording
LCNB recorded provisions for credit losses totaling $2,077,000 for 2023, compared to a $250,000 provision for 2022 and a $269,000 net recovery for 2021. Included in the provision for credit losses for 2023 was a $1,722,000 provision expense related to non-PCD loans acquired through the Cincinnati Federal acquisition. Calculating an appropriate level for the allowance and provision for credit losses involves a high degree of management judgment and is, by its nature, imprecise. Revisions may be necessary as more information becomes available.
Current wording
LCNB recorded provisions for credit losses and unfunded commitments totaling $1,962,000 for 2024, compared to a $2,077,000 provision for 2023 and a $250,000 provision for 2022. Included in the provision for credit losses for 2024 and 2023 were $763,000 and a $1,722,000, respectively, related to non-PCD loans acquired through the EFBI and CNNB acquisitions. Calculating an appropriate level for the allowance and provision for credit losses involves a high degree of management judgment and is, by its nature, imprecise. Revisions may be necessary as more information becomes available.
Previous wording
LCNB's effective tax rates for the years ended December 31, 2023, 2022, and 2021 were 17.2%, 17.9%, and 18.0%, respectively. The difference between the statutory rate of 21% and the effective tax rate is primarily due to tax-exempt interest income from municipal securities, tax-exempt earnings from bank owned life insurance, tax-exempt earnings from LCNB Risk Management, Inc., and tax credits and losses related to investments in affordable housing tax credit limited partnerships.
Current wording
LCNB's effective tax rates for the years ended December 31, 2024, 2023, and 2022 were 15.5%, 17.2%, and 17.9%, respectively. The difference between the statutory rate of 21% and the effective tax rate is primarily due to tax-exempt interest income from municipal securities, tax-exempt earnings from bank owned life insurance, tax-exempt earnings from LCNB Risk Management, Inc. and tax credits and losses related to investments in affordable housing tax credit limited partnerships netted with the net impact of non-deductible merger costs for 2023 and 2024. The effective tax rate for 2024 was lower due to tax-exempt items not decreasing in proportion to the overall decrease in earnings.
Previous wording
Effective liquidity management ensures that cash is available to meet the cash flow needs of borrowers and depositors, pay dividends to shareholders, and meet LCNB's operating cash needs. Primary funding sources include customer deposits with the Bank, short-term and long-term borrowings from the Federal Home Loan Bank, short-term line of credit arrangements totaling $85.0 million with three correspondent banks, and interest and repayments received from LCNB's loan and investment portfolios.
Current wording
Effective liquidity management ensures that cash is available to meet the cash flow needs of borrowers and depositors, pay dividends to shareholders, and meet LCNB's operating cash needs. Primary funding sources include customer deposits with the Bank, short-term and long-term borrowings from the FHLB, line of credit arrangements totaling $115.0 million with three correspondent banks, and interest and repayments received from LCNB's loan and investment portfolios.
Previous wording
Total remaining borrowing capacity with the Federal Home Loan Bank at December 31, 2023 was approximately $89.2 million. Additional borrowings of approximately $63.6 million were available through the line of credit arrangements at year-end.
Current wording
Total remaining borrowing capacity with the FHLB at December 31, 2024 was approximately $115.4 million. Additional borrowings of approximately $115.0 million were available through the line of credit arrangements at year-end.
Previous wording
Commitments to extend credit at December 31, 2023 totaled $267.4 million and are more fully described in Note 14 - Commitments and Contingent Liabilities to LCNB's consolidated financial statements. Since many commitments to extend credit may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.
Current wording
Commitments to extend credit at December 31, 2024 totaled $290.5 million and are more fully described in Note 14 - Commitments and Contingent Liabilities to LCNB's consolidated financial statements. Since many commitments to extend credit may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.
Previous wording
The Bank is required by banking regulators to meet certain minimum levels of capital adequacy. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on LCNB's and the Bank's financial statements. These minimum levels are expressed in the form of certain ratios. Capital is separated into Tier 1 capital (essentially shareholders' equity less goodwill and other intangibles) and Tier 2 capital (essentially the allowance for credit losses limited to 1.25% of risk-weighted assets). Common Equity Tier 1 Capital is the sum of common stock, related surplus, and retained earnings, net of treasury stock, accumulated other comprehensive income, and other adjustments. The first three ratios, which are based on the degree of credit risk in the Bank's 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. Information summarizing the regulatory capital of the Bank at December 31, 2023 and 2022 and corresponding regulatory minimum requirements is included in Note 15 - Regulatory Matters and Impact on Payment of Dividends.
Current wording
The Bank is required by banking regulators to meet certain minimum levels of capital adequacy. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on LCNB's and the Bank's financial statements. These minimum levels are expressed in the form of certain ratios. Capital is separated into Tier 1 capital (essentially shareholders' equity less goodwill and other intangibles) and Tier 2 capital (essentially the allowance for credit losses limited to 1.25% of risk-weighted assets). Common Equity Tier 1 Capital is the sum of common stock, related surplus, and retained earnings, net of treasury stock, accumulated other comprehensive income, and other adjustments. The first three ratios, which are based on the degree of credit risk in the Bank's 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. Information summarizing the regulatory capital of the Bank at December 31, 2024 and 2023 and corresponding regulatory minimum requirements is included in Note 15 - Regulatory Matters and Impact on Payment of Dividends.
Previous wording
the Program, LCNB is authorized to repurchase up to 500,000 of its outstanding common shares. The Program replaced and superseded LCNB’s prior share repurchase program, which was adopted on August 24, 2020.
Current wording
On May 27, 2022, LCNB's Board of Directors authorized a share repurchase program (the “Program”). Under the terms of the Program, LCNB is authorized to repurchase up to 500,000 of its outstanding common shares. The Program replaced and superseded LCNB’s prior share repurchase program, which was adopted on August 24, 2020.
Previous wording
Under the Program, LCNB may purchase common shares through various means such as open market transactions, including
Current wording
Under the Program, LCNB may purchase common shares through various means such as open market transactions, including block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and amount of any repurchases will be determined at LCNB's discretion. Factors include, but are not limited to, share price, trading volume, and general market conditions, along with LCNB’s general business conditions. The Program may be suspended or discontinued at any time and does not obligate LCNB to acquire any specific number of its common shares.
Previous wording
Allowance for Credit Losses. The allowance is maintained at a level LCNB management believes is adequate to absorb
Current wording
Allowance for Credit Losses. The allowance is maintained at a level LCNB management believes is adequate to absorb estimated credit losses identified and inherent in the loan portfolio. The allowance is established through a provision for credit losses charged to expense. Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. The allowance is an amount that management believes will be adequate to absorb estimated losses over the contractual terms in the loan portfolio based on evaluations of the collectability of loans and prior loan loss experience. The evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, and current and forecasted economic conditions that may affect the borrowers' ability to pay. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
Previous wording
In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This ASU (as
Current wording
In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This ASU (as subsequently amended by ASU 2018-19) significantly changed how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. This standard replaced the “incurred loss” approach with an “expected loss” model. Referred to as the CECL model, this standard applies to financial assets subject to credit losses and measured at amortized cost and certain off-balance sheet credit exposures. The standard also expanded disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance. In addition, entities need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination.
Previous wording
LCNB adopted CECL effective January 1, 2023 using the modified retrospective method for all financial assets measured at
Current wording
LCNB adopted CECL effective January 1, 2023 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under CECL while prior period amounts continue to be reported in accordance with the incurred loss accounting standards. The transition adjustment of the CECL adoption included an increase in the allowance of $2.4 million, and a $1.9 million decrease to the retained earnings account to reflect the cumulative effect of adopting CECL on the Consolidated Balance Sheet, with the $0.5 million tax impact portion being recorded as part of the deferred tax asset in other assets in the Consolidated Balance Sheet.
Previous wording
See Note 1- Basis of Presentation - Adoption of New Accounting Pronouncements in this Annual Report on Form 10-K for
Current wording
See Note 1- Basis of Presentation - Adoption of New Accounting Pronouncements in this Annual Report on Form 10-K for further detailed descriptions of LCNB's estimation process and methodology related to the allowance. See also Note 4 – Loans in this Annual Report on Form 10-K for further information regarding LCNB's loan portfolio and allowance.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The increase in total interest income was due primarily to a $24,583,000 increase in interest income from loans due to a $297.7 million increase in average loans and to a 56 basis point increase in the average rate earned. Average loans increased due to organic growth in the portfolio in addition to loans acquired through mergers with CNNB in quarter four of 2023 and EFBI in quarter two of 2024.
Rearranged previous paragraphs (26)
Previous report — wording carried elsewhere
On May 27, 2022, LCNB's Board of Directors authorized a share repurchase program (the “Program”). Under the terms of
Previous report — wording carried elsewhere
block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and
Previous report — wording carried elsewhere
amount of any repurchases will be determined at LCNB's discretion. Factors include, but are not limited to, share price, trading
Previous report — wording carried elsewhere
volume, and general market conditions, along with LCNB’s general business conditions. The Program may be suspended or
Previous report — wording carried elsewhere
discontinued at any time and does not obligate LCNB to acquire any specific number of its common shares.
Previous report — wording carried elsewhere
estimated credit losses identified and inherent in the loan portfolio. The allowance is established through a provision for credit
Previous report — wording carried elsewhere
losses charged to expense. Loans are charged against the allowance for credit losses when management believes that the
Previous report — wording carried elsewhere
collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. The allowance is an
Previous report — wording carried elsewhere
amount that management believes will be adequate to absorb estimated losses over the contractual terms in the loan portfolio
Previous report — wording carried elsewhere
based on evaluations of the collectability of loans and prior loan loss experience. The evaluations take into consideration such
Previous report — wording carried elsewhere
factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans,
Previous report — wording carried elsewhere
and current and forecasted economic conditions that may affect the borrowers' ability to pay. This evaluation is inherently
Previous report — wording carried elsewhere
subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
Previous report — wording carried elsewhere
subsequently amended by ASU 2018-19) significantly changed how entities measure credit losses for most financial assets and
Previous report — wording carried elsewhere
certain other instruments that are not measured at fair value through net income. This standard replaced the “incurred loss”
Previous report — wording carried elsewhere
approach with an “expected loss” model. Referred to as the CECL model, this standard applies to financial assets subject to
Previous report — wording carried elsewhere
credit losses and measured at amortized cost and certain off-balance sheet credit exposures. The standard also expanded
Previous report — wording carried elsewhere
disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance. In addition,
Previous report — wording carried elsewhere
entities need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by
Previous report — wording carried elsewhere
amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are
Previous report — wording carried elsewhere
presented under CECL while prior period amounts continue to be reported in accordance with the incurred loss accounting
Previous report — wording carried elsewhere
standards. The transition adjustment of the CECL adoption included an increase in the allowance of $2.4 million, and a $1.9
Previous report — wording carried elsewhere
million decrease to the retained earnings account to reflect the cumulative effect of adopting CECL on the Consolidated
Previous report — wording carried elsewhere
Balance Sheet, with the $0.5 million tax impact portion being recorded as part of the deferred tax asset in other assets in the
Previous report — wording carried elsewhere
further detailed descriptions of LCNB's estimation process and methodology related to the allowance. See also Note 4 – Loans
Previous report — wording carried elsewhere
in this Annual Report on Form 10-K for further information regarding LCNB's loan portfolio and allowance.