LCNB CORP
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 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-Q
Period ended 2025-03-31; filed 2025-05-07.
0001437749-25-015116
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001437749-25-025068
Item 2. 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 61 previous paragraphs and 67 current paragraphs.
43 unchanged; 15 reworded; 4 added; 3 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 37 previous and 40 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 (4)
Current report
The $3.3 million decrease in total interest expense was primarily due to a $150.6 million decrease in average interest-bearing liabilities and to a 61 basis point decrease in the average rate paid for these liabilities.
Current report
The $5.2 million decrease in total interest expense was primarily due to a $93.2 million decrease in average interest-bearing liabilities and to a 50 basis point decrease in the average rate paid for these liabilities.
Current report
The provisions for credit losses on loans during the three and six-month 2024 periods included $763,000 recognized on non-PCD loans acquired through the EFBI merger and the six-month period included a $1.2 million increase for a commercial real estate, non-owner occupied loan that was individually evaluated for the first time during the first quarter 2024. These increases were largely offset by a recovery of credit losses in the pooled real estate mortgage loan category. The residential real estate mortgage loan category had a recovery of credit losses primarily due to a decrease in loss rates and a decrease in loan balances caused by a transfer to the loans held-for-sale category.
Current report
The provisions for credit losses on loans during the three and six-month 2025 periods benefited from a reversal of the $1.2 million increase for a commercial real estate, non-owner occupied loan originally recognized during the first quarter 2024 and mentioned in the previous paragraph. LCNB entered into a contract to sell the property during the second quarter of 2025.
Removed paragraphs (3)
Previous report
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 report
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 condensed consolidated balance sheet.
Previous report
The $1.8 million decrease in total interest expense was primarily due to a $1.6 million decrease in interest expense for interest-bearing demand deposits, money market deposits, and short-term borrowings The decrease was partially offset by an increase in interest expense for IRA and time certificates. Interest expense on interest-bearing demand and money market deposits decreased primarily due to a 79 basis point decrease in the average rate paid for these deposits and secondarily to a $72.7 million decrease in average deposit balances. Interest expense associated with short-term borrowings decreased due to payoffs of short-term borrowings during 2024. Interest expense increased on IRA and time certificates due to increased balances, primarily from acquisition activity, and was partially offset by a 32 basis point decrease in the average rate paid for these deposits.
Reworded paragraphs (15)
Previous wording
Net income for the three months ended March 31, 2025 was $4.6 million (total basic and diluted earnings per share of $0.33). This compares to net income of $1.9 million (total basic and diluted earnings per share of $0.15) for the same three-month periods in 2024. Results for the 2024 periods were affected by the expenses incurred in connection with the acquisition of Eagle Financial Bancorp, Inc. on April 12, 2024 and Cincinnati Bancorp, Inc. on November 1, 2023.
Current wording
Net income for the respective three and six months ended June 30, 2025 was $5.9 million (total basic and diluted earnings per share of $0.41) and $10.5 million (total basic and diluted earnings per share of $0.74). This compares to net income of $0.9 million (total basic and diluted earnings per share of $0.07) and $2.8 million (total basic and diluted earnings per share of $0.21) for the same three and six-month periods in 2024. Results for the 2024 periods were affected by expenses incurred in connection with the acquisition of EFBI on April 12, 2024 and CNNB on November 1, 2023.
Previous wording
Net interest income for the three months ended March 31, 2025 was $16.3 million. This compares to net interest income of $13.9 million for the same three-month period in 2024. The growth in net interest income was primarily due to the reduction in average interest rates paid on interest-bearing liabilities and higher average rates earned on loans. LCNB’s tax equivalent net interest margin was 3.25% for the first quarter 2025, compared to 2.72% for the same period last year.
Current wording
Net interest income for the three and six months ended June 30, 2025 was $17.5 million and $33.8 million, respectively. This compares to net interest income of $15.2 million and $29.1 million for the same three and six-month periods in 2024. The growth in net interest income was primarily due to a decrease on the average rate paid on interest-bearing liabilities and a decrease in the average balances of these liabilities, partially offset by a decrease in the average balance of loans outstanding. LCNB's tax equivalent net interest margin for the first six months of 2025 was 3.36%, compared to 2.80% for the same period last year.
Previous wording
LCNB recorded a provision for credit losses of $197 thousand for the three months ended March 31, 2025. This compares to a provision of $125 thousand for the same three-month period in 2024.
Current wording
LCNB recorded a provision for credit losses of $18 thousand and $215 thousand for the three and six months ended June 30, 2025. This compares to a provision of $528 thousand and $653 thousand for the same three and six-month periods in 2024. The provisions for 2024 included $763 thousand recognized on non-PCD loans acquired through the EFBI merger.
Previous wording
Non-interest income for the three months ended March 31, 2025 was $5.2 million. This compares to non-interest income of $3.9 million for the same period in 2024. The increase was primarily due to higher amounts of net gains from sales of loans, fiduciary income, service charges and fees on deposit accounts, and other income.
Current wording
Non-interest income for the three and six months ended June 30, 2025 was $5.2 million and $10.5 million, respectively. This compares to non-interest income of $4.1 million and $8.0 million for the same periods in 2024. The increases were primarily due to higher amounts of net gains from sales of loans, fiduciary income, service charges and fees on deposit accounts, and other income. Partially offsetting non-interest income during the three and six months ended June 30, 2024 was an $843 thousand pretax loss on the sale of approximately $48.9 million of below market rate loans acquired from CNNB.
Previous wording
Non-interest expense for the three months ended March 31, 2025 was $15.8 million, compared to $15.5 million for the same three-month period in 2024. The $300 thousand increase was primarily due to higher operating expenses associated with the Eagle acquisition during April 2024 and increased marketing expenses, partially offset by the lack of merger-related expenses compared to the same period last year. LCNB had $775 thousand of one-time merger-related expenses that occurred in the first quarter of 2024.
Current wording
Non-interest expense for the three and six months ended June 30, 2025 was $15.6 million and $31.4 million, respectively. This compares to non-interest expense of $17.8 million and $33.3 million for the same three and six-month periods in 2024. The decreases were primarily due to lower merger related expenses, partially offset by operating expenses associated with the EFBI acquisition during April 2024 and increased marketing expenses compared to the same period last year. LCNB had $2.3 million and $3.1 million of one-time merger-related expenses that occurred during the three and six months ended June 30 2024, respectively, compared to $140 thousand of such expenses for the three and six months ended June 30, 2025.
Previous wording
The $559 thousand increase in total interest income was primarily due to a $499 thousand increase in loan interest income. The increase in loan interest income was primarily due to a 16 basis point (a basis point equals 0.01%) increase in the average rate earned on the loan portfolio, slightly offset by a $674 thousand decrease in average loan balances.
Current wording
The $1.0 million decrease in total interest income was primarily due to a $1.0 million decrease in loan interest income. The decrease in loan interest income was primarily due to a $99.3 million decrease in average loan balances, partially offset by a 7 basis point (a basis point equals 0.01%) increase in the average rate earned on the loan portfolio.
Previous wording
Net interest income on a fully taxable-equivalent basis for the three months ended March 31, 2025 totaled $16.3 million, an increase of $2.4 million from the comparable period in 2024. Total interest income increased $559 thousand and total interest expense decreased $1.8 million.
Current wording
Net interest income on a fully taxable-equivalent basis for the six months ended June 30, 2025 totaled $33.9 million, an increase of $4.7 million from the comparable period in 2024. Total interest income decreased $463 thousand and total interest expense decreased $5.2 million.
Previous wording
LCNB recorded a provision for credit losses of $197 thousand for the first quarter of 2025, compared to $125 thousand for the comparable period in 2024. The provision for the 2025 period included a provision for credit losses on loans of $162 thousand and a provision for off-balance-sheet credit exposures of $34 thousand. The provision for the 2024 period included a provision for credit losses on loans of $77 thousand and a provision for off-balance-sheet credit exposures of $48 thousand.
Current wording
LCNB recorded a provision for credit losses of $18 thousand for the second quarter of 2025, compared to $528 thousand for the comparable period in 2024. The provision for the 2025 period included a provision for credit losses on loans of $63 thousand and a recovery on off-balance-sheet credit exposures of $45 thousand. The provision for the 2024 period included a provision for credit losses on loans of $542 thousand and a net recovery for off-balance-sheet credit exposures of $16 thousand. For the six months ended June 30, 2025, LCNB recorded a provision for credit losses of $215 thousand, compared to a provision of $653 thousand for the comparable period in 2024. The provision for the six months ended June 30, 2025 included a provision for credit losses on loans of $225 thousand and a recovery on off-balance-sheet credit exposures of $11 thousand. The provision for the 2024 six-month period included a provision for credit losses on loans of $620 thousand and a provision for off-balance-sheet credit exposures of $33 thousand.
Previous wording
Net charge-offs for the three months ended March 31, 2025 totaled $39 thousand, compared to net charge-offs of $45 thousand for the same period in 2024.
Current wording
Net charge-offs for the three and six months ended June 30, 2025 totaled $79 thousand and $118 thousand, respectively, compared to net charge-offs of $18 thousand and $63 thousand for the same respective periods in 2024.
Previous wording
A comparison of non-interest income for the three months ended March 31, 2025 and March 31, 2024 is as follows (in thousands):
Current wording
A comparison of non-interest income for the three and six months ended June 30, 2025 and June 30, 2024 is as follows (in thousands):
Previous wording
A comparison of non-interest expense for the three months ended March 31, 2025 and March 31, 2024 is as follows (in thousands):
Current wording
A comparison of non-interest expense for the three and six months ended June 30, 2025 and June 30, 2024 is as follows (in thousands):
Previous wording
LCNB's effective tax rate for the three months ended March 31, 2025 was 16.4%, compared to 14.0% for the same period in 2024. The difference between the statutory rate of 21% and the effective tax rates 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. The effective tax rate for 2024 was lower due to tax-exempt items not decreasing in proportion to the overall decrease in earnings.
Current wording
LCNB's effective tax rate for the three and six months ended June 30, 2025 was 17.8% and 17.2%, respectively, compared to 2.0% and 10.4% for the same respective periods in 2024. The difference between the statutory rate of 21% and the effective tax rates 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. The effective tax rates for 2024 were lower due to tax-exempt items not decreasing in proportion to the overall decrease in earnings, partially offset by the tax effect of non-deductible merger-related expenses.
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, line of credit arrangements totaling $115.0 million with three correspondent banks, and interest and repayments received from LCNB's loan and investment portfolios. In addition, LCNB has approximately $108 million in off-balance sheet insured cash sweeps immediately available for liquidity.
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 Federal Home Loan Bank, line of credit arrangements totaling $115.0 million with three correspondent banks, and interest and repayments received from LCNB's loan and investment portfolios. In addition, LCNB has approximately $60.9 million in off-balance sheet insured cash sweeps immediately available for liquidity.
Previous wording
Total remaining borrowing capacity with the Federal Home Loan Bank at March 31, 2025 was approximately $144.3 million. Additional borrowings of approximately $115.0 million were available through line of credit arrangements with correspondent banks.
Current wording
Total remaining borrowing capacity with the Federal Home Loan Bank at June 30, 2025 was approximately $148.1 million. Additional borrowings of approximately $115.0 million were available through line of credit arrangements with correspondent banks.
Previous wording
Commitments to extend credit at March 31, 2025 totaled $291.5 million and are more fully described in Note 11 - Commitments and Contingent Liabilities to LCNB's condensed 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 required to satisfy the commitment reported prior to its expiration.
Current wording
Commitments to extend credit at June 30, 2025 totaled $280.9 million and are more fully described in Note 11 - Commitments and Contingent Liabilities to LCNB's condensed 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 required to satisfy the commitment reported prior to its expiration.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Net interest income on a fully taxable-equivalent basis for the three months ended June 30, 2025 totaled $17.6 million, an increase of $2.3 million from the comparable period in 2024. Total interest expense decreased $3.3 million, partially offset by a $1.0 million decrease in total interest income .
Current report — wording carried from elsewhere
Six Months Ended June 30, 2025 vs. June 30, 2024
Current report — wording carried from elsewhere
The following table presents, for the six months ended June 30, 2025 and June 30, 2024, average balances for interest-earning assets and interest-bearing liabilities, the income or expense related to each item, and the resulting average yields earned or rates paid.
Current report — wording carried from elsewhere
The following table presents the changes in taxable-equivalent basis interest income and expense for each major category of interest-earning assets and interest-bearing liabilities and the amount of change attributable to volume and rate changes for the six months ended June 30, 2025 as compared to the same period in 2024. Changes not solely attributable to rate or volume have been allocated to volume and rate changes in proportion to the relationship of absolute dollar amounts of the changes in each.
Current report — wording carried from elsewhere
The $463 thousand decrease in total interest income was primarily due to a $499 thousand decrease in loan interest income. The decrease in loan interest income was primarily due to a $50.0 million decrease in average loan balances, partially offset by an 11 basis point increase in the average rate earned on the loan portfolio.