LCNB CORP

(Unaudited)

NOTE1 - BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited interim consolidated condensed financial statements include LCNB Corp. and its wholly-owned subsidiaries: LCNB National Bank and LCNB Risk Management, Inc., its captive insurance company. All material intercompany transactions and balances are eliminated in consolidation.

The unaudited interim consolidated condensed financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation of the Company's financial position, results of consolidated operations, and cash flows for the interim periods, as required by Regulation S-X, Rule10-01.

The consolidated condensed balance sheet as of* December 31, 2024* has been derived from the audited consolidated balance sheet as of that date.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Results of operations for thethree andnine months ended* September 30, 2025* arenot necessarily indicative of the results to be expected for the full year ending* December**31,* 2025. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements, accounting policies, and financial notes thereto included in LCNB's2024 Annual Report on Form10-K filed with the SEC.

Certain prior period amounts have been reclassified to conform to the current year presentation. Specifically, certain contracts have been reclassed out of Note11, Commitments and Contingent Liabilities, as they donot constitute commitments to extend credit due to being unconditionally cancelable. Additionally, prior period cash flows previously presented as a change in other liabilities have been reclassified to funding of tax credit investments to align with the current year's reporting. These reclassifications donot impact the reported results of operations.

ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS

ASU2023*-09 “Income Taxes (Topic740): Improvements to Income Tax Disclosures.” *

ASUNo. 2023-09 was issued in* December 2023and became effective for LCNB on January 1, 2025.The amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation, and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than5* percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid: (1) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes; and (2) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than5 percent of total income taxes paid (net of refunds received). The amendments also require that all entities disclose the following information: (1) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign; and (2) income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. Adoption of ASUNo. 2023-09 didnot have a material impact to the financial statements of the Company.

ASU2024*-01 “Compensation - Stock Compensation (Topic718): Scope Application of Profits Interest and Similar Awards,” *

ASUNo. 2024-01 was issued in* March 2024and became effective for LCNB on January 1, 2025.It clarifies how an entity determines whether a profits interest or similar award is within the scope of Topic718* or isnot a share-based payment arrangement and, therefore, is within the scope of other guidance. ASU2024-01 provides an illustrative example with multiple fact patterns and also amends certain language in the “Scope” and “Scope Exceptions” sections of Topic718 to improve its clarity and operability without changing the guidance. Entities can apply the amendments either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. If prospective application is elected, an entity must disclose the nature of and reason for the change in accounting principle. Adoption of ASUNo. 2024-01 didnot have a material impact to the financial statements of the Company.

RECENT ACCOUNTING PRONOUNCEMENTSNOT YET EFFECTIVE

From time to time the FASB issues an ASU to communicate changes to U.S. GAAP. The following information provides brief summaries of newly issued butnot yet effective ASUs that could have an effect on LCNB’s financial position or results of consolidated operations:

ASU2025*-05 “Financial Instruments — Credit Losses (Topic326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASUNo.* 2025-05 simplifies CECL for short-term receivables by creating a practical expedient. Under the expedient, entities estimate expected credit losses assuming conditions at the balance sheet date continue over the asset's remaining life, while still adjusting historical loss data for known, current customer or company factors. The amendment is adopted prospectively and doesnot change the treatment of investments and loans. The ASU is effective for public business entities for annual periods beginning after* December 15, 2025.Early adoption is permitted for both interim and annual reporting periods in which financial statements havenot* been issued or made available for issuance. LCNB will adopt this ASU for the reporting period beginning* January 1, 2026,and adoption of these amendments willnot* have a material impact to the financial statements of the Company.

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NOTE2 - BUSINESS COMBINATIONS

Eagle Financial Bancorp, Inc.

On* April 12, 2024,LCNB acquired Eagle Financial Bancorp, Inc. (“EFBI”), the holding company for EAGLE.bank, an Ohio state-chartered bank. Under the terms of the definitive merger agreement, EFBI merged with and into LCNB Corp., immediately followed by the merger of EAGLE.bank with and into LCNB National Bank. EAGLE.bank operatedthree* full-service banking offices in Cincinnati, Ohio, which became offices of LCNB after the merger. This transaction increased LCNB’s presence in the Cincinnati market.

Subject to the terms of the merger agreement, EFBI shareholders had the opportunity to elect to receive either 1.1401 shares of LCNB Corp. stock, $19.10 per share in cash for each share of EFBI common stock owned, or a combination thereof subject to at least 60%, butnot more than 70%, of the shares of EFBI being exchanged for LCNB common stock. The fair value of the common stock issued as part of the consideration was determined on the basis of the closing price of LCNB's common stock on the acquisition date.

The following table summarizes the fair value of the total consideration transferred as a part of the EFBI acquisition and the fair value of identifiable assets acquired and liabilities assumed as originally reported at* June 30, 2024and as adjusted at June 30, 2025 (*in thousands).

The fair value and gross contractual amounts of non-PCD loans as of the acquisition date was $101.7 million and $112.5 million, respectively. LCNB recorded a provision for credit losses on these loans of $763 thousand during thesecond quarter of2024.

Effective* April 11, 2025,management finalized the fair values of the acquired assets and assumed liabilities within the12* month post-acquisition date, as allowed by GAAP. The consideration adjustments in the table above are associated with the unearned portion of EAGLE.bank's employee stock ownership plan. The other assets, other liabilities and resulting deferred tax adjustments in the table above were related to the updated fair value adjustments.

The amount of goodwill recorded reflects LCNB's expansion in the Cincinnati market and related synergies that are expected to result from the acquisition and represents the excess purchase price over the estimated fair value of the net assets acquired. The goodwill willnot be amortizable on LCNB's financial records and willnot be deductible for tax purposes. Total goodwill will be subject to an annual test for impairment and the amount impaired, if any, will be charged to expense at the time of impairment.

Direct expenses related to the EFBI acquisition totaled $0 and $124 thousand during thethree andnine months ended* September 30, 2025,and totaled $271 thousand and $3.0 million during thethree* andnine months ended* September**30,* 2024. They were expensed as incurred and are recorded as merger-related expenses in the consolidated statements of income.

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NOTE3 - INVESTMENT SECURITIES

The amortized cost and estimated fair value of debt securities at* September 30, 2025* and* December 31, 2024* are summarized as follows (in thousands):

The amortized cost of debt securities in the above table excludes accrued interest of $1.14 million and $993 thousand at* September 30, 2025* and* December 31, 2024*, respectively, that is recorded inother assets on the consolidated condensed balance sheets.

Expected credit losses on debt securities, held-to-maturity, were $12 thousand and $5 thousand at* September 30, 2025* and* December 31, 2024*, respectively.

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Information concerning debt securities with gross unrealized losses at* September 30, 2025* and* December 31, 2024*, aggregated by length of time that individual securities have been in a continuous loss position, is as follows (in thousands):

At* September 30, 2025*, LCNB’s securities portfolio consisted of 156 securities,145 of which were in an unrealized loss position. At* December 31, 2024*, LCNB's securities portfolio consisted of 161 securities,157 of which were in an unrealized loss position.

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Each quarter, LCNB performs an analysis to determine if any of the unrealized losses on available-for-sale debt securities are comprised of credit losses as compared to unrealized losses due to market interest rate adjustments. The assessment includes a review of the unrealized loss for each security issuance held; the financial condition and near-term prospects of the issuer, including external credit ratings and recent downgrades; and LCNB's ability and intent to hold the security for a period of time sufficient for a recovery in value. LCNB also considers the extent to which the securities are issued by the federal government or its agencies and any guarantee of issued amounts by those agencies. The portfolio continues to consist of a mix of fixed and floating-rate, high quality securities, largely rated AA (or better), displaying an overall effective duration of approximately 3.0 years. No credit losses were determined to be present as of* September 30, 2025*, as there wasno credit quality deterioration noted. Therefore,no provision for credit losses on available-for-sale debt securities was recognized for thethird quarter of2025.

Debt securities with a market value of $130.6 million and $116.2 million at* September 30, 2025* and* December 31, 2024*, respectively, were pledged to secure public deposits and for other purposes required or as permitted by law.

Excluding holdings in U.S. Treasury securities and U.S. government agencies, there wereno investments in securities of any issuer that exceeded10% of LCNB's consolidated shareholders' equity at* September 30, 2025*.

Contractual maturities of debt securities at* September 30, 2025* were as follows (in thousands). Actual maturities* may*differ from contractual maturities when issuers have the right to call or prepay obligations.

Certain information concerning the sale of debt securities available-for-sale for thethree andnine months ended* September 30, 2025and2024* was as follows (in thousands):

Realized gains or losses from the sale of securities are computed using the specific identification method.

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Equity securities with a readily determinable fair value are carried at fair value, with changes in fair value recognized in other operating income in the consolidated condensed statements of income. Equity securities without a readily determinable fair value are measured at cost minus impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions, as defined, for identical or similar investments of the same issuer. LCNB wasnot aware of any impairment or observable price change adjustments that needed to be made at* September 30, 2025* on its investments in equity securities without a readily determinable fair value.

The amortized cost and estimated fair value of equity securities with a readily determinable fair value at* September 30, 2025* and* December 31, 2024* are summarized as follows (in thousands):

Certain information concerning changes in the fair value of equity securities with a readily determinable fair value for thethree andnine months ended* September 30, 2025and2024* were as follows (in thousands):

LCNB is a member of the FHLB system and its regional FRB. Members are required to own a certain amount of stock based on predetermined formulas. FHLB and FRB stock are carried at cost, which is equal to par value, and periodically evaluated for impairment based on ultimate recovery of par value.

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NOTE4 - LOANS

Major classifications of loans at* September 30, 2025* and* December 31, 2024* were as follows (in thousands):

Loans in the above table are shown net of deferred origination fees and costs. Deferred origination fees, net of related costs, were $840 thousand and $796 thousand at* September 30, 2025* and* December 31, 2024*, respectively. Accrued interest receivable of $7.7 million and $7.7 million are excluded from the balances above as of* September 30, 2025* and* December 31, 2024*, respectively, and are recorded inother assets in the consolidated condensed balance sheets.

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Non-accrual loans by class of receivable as of* September 30, 2025* and* December 31, 2024* were as follows (in thousands):

Interest income recognized on nonaccrual loans totaled approximately $2 thousand and $230 thousand during thenine months ended* September 30, 2025* and2024, respectively. Accrued interest reversed and charged against interest income for these loans totaled approximately $9 thousand and $36 thousand during thenine months ended* September 30, 2025* and2024, respectively.

The ratio of non-accrual loans to total loans outstanding at* September 30, 2025* and* December 31, 2024* was 0.11% and 0.26%, respectively.

ALLOWANCE FOR CREDIT LOSSES

The ACL is an estimate of the expected credit losses on financial assets measured at amortized cost, which is measured using relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. A provision for credit losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors.

QUANTITATIVE CONSIDERATIONS

The ACL is primarily calculated utilizing a DCF model. Key inputs and assumptions used in this model are discussed below:

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QUALITATIVE CONSIDERATIONS

In addition to the quantitative model, management considers the need for qualitative adjustment for risksnot considered in the DCF. Factors that are considered by management in determining loan collectability and the appropriate level of the ACL are listed below:

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The following table presents activity in the allowance for credit losses by portfolio segment for thethree andnine months ended* September 30, 2025and2024* (in thousands):

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The ratio of the allowance for credit losses for loans to total loans at* September 30, 2025* and* December 31, 2024* was 0.72% and 0.70%, respectively.

For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date.

The following table presents the carrying value and related allowance of collateral dependent individually evaluated loans by class segment at the dates indicated (in thousands):

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The risk characteristics of LCNB's material loan portfolio segments were as follows:

Commercial & Industrial Loans. LCNB’s commercial & industrial loan portfolio consists of loans for a variety of purposes, including, for example, loans to fund working capital requirements (such as inventory and receivables financing) and purchases of machinery and equipment. LCNB offers a variety of commercial & industrial loan arrangements, including term loans, balloon loans, and lines of credit. Commercial & industrial loans can have a fixed or variable rate, with maturities ranging fromone toten years. Commercial & industrial loans are offered to businesses and professionals for short and medium terms on both a collateralized and uncollateralized basis. Commercial & industrial loans typically are underwritten on the basis of the borrower’s ability to make repayment from the cash flow of the business. Collateral, when obtained,* may*include liens on furniture, fixtures, equipment, inventory, receivables, or other assets. As a result, such loans involve complexities, variables, and risks that require thorough underwriting and more robust servicing than other types of loans.

Commercial, Secured by Real Estate Loans. Commercial real estate loans include loans secured by a variety of commercial, retail and office buildings, religious facilities, hotels, multifamily (more thanfour-family) residential properties, construction and land development loans, and other land loans. Mortgage loans secured by owner-occupied agricultural property are included in this category. Commercial real estate loan products generally amortize over five totwenty-five years and are payable in monthly principal and interest installments. Some have balloon payments due withinone toten years after the origination date. The majority have adjustable interest rates with adjustment periods ranging fromone toten years, some of which are subject to established “floor” interest rates.

Commercial real estate loans are underwritten based on the ability of the property, in the case of income-producing property, or the borrower’s business to generate sufficient cash flow to amortize the debt. Secondary emphasis is placed upon global debt service, collateral value, financial strength and liquidity of any and all guarantors, and other factors. Commercial real estate loans are generally originated with a 75% to 85% maximum loan to appraised value ratio, depending upon borrower occupancy rates.

Residential Real Estate Loans. Residential real estate loans include loans secured byfirst orsecond mortgage liens onone tofour-family residential properties. Home equity lines of credit are also included in this category. First andsecond mortgage loans are generally amortized over five tothirty years with monthly principal and interest payments. Home equity lines of credit generally have afive year or less draw period with interest only payments followed by a repayment period with monthly payments based on the amount outstanding. LCNB offers both fixed and adjustable-rate mortgage loans. Adjustable-rate loans are available with adjustment periods ranging betweenone tofifteen years and adjust according to an established index plus a margin, subject to certain floor and ceiling rates. A substantial majority of home equity lines of credit have a variable rate of interest based on the Wall Street Journal prime rate plus a margin.

Residential real estate loans are underwritten primarily based on the borrower’s ability to repay, prior credit history, and the value of the collateral. LCNB generally requires private mortgage insurance forfirst mortgage loans that have a loan to appraised value ratio of greater than 80% or* mayrequire other credit enhancements forsecond* lien mortgage loans.

Consumer Loans. LCNB’s portfolio of consumer loans generally includes secured and unsecured loans to individuals for household, family and other personal expenditures. Secured loans include loans to fund the purchase of automobiles, recreational vehicles, boats, and similar acquisitions. Consumer loans made by LCNB generally have fixed rates and terms ranging up to 72 months, depending upon the nature of the collateral, size of the loan, and other relevant factors. Consumer loans generally have higher interest rates but pose additional risks of collectability and loss when compared to certain other types of loans. Collateral, if present, is generally subject to damage, wear, and depreciation. The borrower’s ability to repay is of primary importance in the underwriting of consumer loans.

Agricultural Loans. LCNB’s portfolio of agricultural loans includes loans for financing agricultural production and for financing the purchase of equipment used in the production of agricultural products. LCNB’s agricultural loans are generally secured by farm machinery, livestock, crops, vehicles, or other agricultural-related collateral.

Other Loans, Including Deposit Overdrafts. Other loans* mayinclude loans that donot* fit in any of the other categories, but the category is primarily composed of overdrafts from transaction deposit accounts. Overdraft payments are recorded as a recovery and overdrafts are generally written off after60 days with a negative balance.

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LCNB’s management monitors the credit quality of its loans on an ongoing basis. This monitoring includes annual reviews for loans with a principal balance greater than*$1* million and bi-annual reviews for loans with a principal balance of more than*$500* thousand through*$1* million. LCNB also has a loan grade monitoring system in place to track and report loan grades and classifications, enabling the identification and management of non-performing loans. ​ Major factors used in determining loan grades vary based on the nature of the loan, but commonly include factors such as debt service coverage, internal cash flow, liquidity, leverage, operating performance, debt burden, FICO scores, occupancy, interest rate sensitivity, and expense burden. ​Commercial real estate loans rated OAEM or worse are reviewed at least quarterly for credit deterioration.

A loan is assigned to a risk category based on relevant information about the ability of the borrower to service the debt including, butnot limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The categories used are:

LCNB generally performs a classification of assets review, including the regulatory classification of assets, on an ongoing basis. The results of the classification of assets review are validated annually by an independentthird-party loan review firm. In the event of a difference in rating or classification between those assigned by the internal and external resources, the Company will utilize the more critical or conservative rating or classification. Loans with regulatory classifications are presented monthly to the Board of Directors.

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The following table presents the amortized cost basis of loans by vintage and credit quality indicators at* September 30, 2025* and* December 31, 2024* (in thousands):

(1) - for the nine months ended September 30, 2025.

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(2) - for the year ended December 31, 2024.

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A loan portfolio aging analysis by class segment at* September 30, 2025* and* December 31, 2024* is as follows (in thousands):

Residential consumer mortgage loans secured by residential real estate in the process of foreclosure totaled $0 and $33 thousand at* September 30, 2025* and* December 31, 2024*, respectively.

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From time to time, the terms of certain loans are modified when concessions are granted to borrowers experiencing financial difficulties. Each modification is separately negotiated with the borrower and includes terms and conditions that reflect the borrower's ability to pay the debt as modified. The modification of the terms of such loans* may*have included one, or a combination of, the following: an interest rate reduction, term extension, forgiveness of principal, or an other-than-insignificant payment delay.

Excluding individually evaluated collateral dependent loans that are measured at fair value, the following tables present the amortized cost basis of loans modified during the reporting period for borrowers who were experiencing financial difficulty at the time of modification, disaggregated by class of financing receivable and type of concession granted (in thousands), as of* September 30, 2024* and2025:

During thethird quarter of2024, one borrower defaulted ontwo consumer loans that underwent maturity-extension and payment-delay modifications during thesecond quarter of2024 while the borrower was known to be experiencing financial difficulty. The borrower remained in default through* February 2025.At September 30, 2025*, the amortized cost basis of thesetwo consumer loans totaled $20 thousand.No other loans defaulted during the year-to-date period ended* September 30, 2025* that, withintwelve months prior to their default, were modified for borrowers experiencing financial difficulty. During thethree andnine months ended* September 30, 2024*, no loans defaulted which, in thetwelve months preceding their default, were modified for borrowers experiencing financial difficulty.

At* September 30, 2025* and* December 31, 2024*, LCNB wasnot committed to lend additional funds to borrowers who, during the respectivenine andtwelve-month reporting periods, were granted loan modifications while experiencing financial difficulty.

Mortgage loans sold to and serviced for the Federal Home Loan Mortgage Corporation and other investors arenot included in the accompanying consolidated condensed balance sheets. The unpaid principal balances of those loans at* September 30, 2025* and* December 31, 2024* were approximately $341.5 million and $397.6 million, respectively.

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NOTE5 - PURCHASED CREDIT DETERIORATED LOANS

Activity during thethree andnine months ended* September 30, 2025and2024* for the accretable discount related to PCD loans acquired from EFBI and CNNB is as follows (in thousands):

NOTE6 - AFFORDABLE HOUSING TAX CREDIT LIMITED PARTNERSHIP INVESTMENTS

LCNB is a limited partner in multiple limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit pursuant to Section42 of the Internal Revenue Code. The purpose of the investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants.

The following table presents the balances of LCNB's affordable housing tax credit investments and related unfunded commitments at* September 30, 2025* and* December 31, 2024* (in thousands):

The net affordable housing tax credit investment is included inother assets and the unfunded commitment is included in accrued interest and other liabilities in the consolidated condensed balance sheets.

LCNB anticipates to fund the unfunded commitment over11.25 years.

The following table presents other information relating to LCNB's affordable housing tax credit investments for thethree andnine months ended* September 30, 2025and2024* (in thousands):

NOTE7 - DEPOSITS

The following table presents the composition of LCNB's deposits at* September 30, 2025* and* December 31, 2024* (in thousands):

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NOTE7 - DEPOSITS** (continued)**

Contractual maturities of time deposits at* September 30, 2025* were as follows (in thousands):

The aggregate amount of time deposits in denominations of*$250* thousand or more at* September 30, 2025* and* December 31, 2024* was $79.4 million and $107.8 million, respectively.

NOTE8 – BORROWINGS

Long-term debt at* September 30, 2025* and* December 31, 2024* was as follows (dollars in thousands):

The term loan with a correspondent financial institution bears a fixed interest rate of 6.5%, amortizes quarterly, and has a final balloon payment due on* June 15, 2028.*

Contractual maturities of long-term debt at* September 30, 2025* and* December 31, 2024* were as follows (in thousands):

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NOTE8 – BORROWINGS** (continued)**

There wereno short-term borrowings at* September 30, 2025* or* December 31, 2024*.

At* September 30, 2025*, LCNB had a short-term revolving line of credit arrangement with a financial institution for a maximum amount of $10 million at an interest rate equal to the Wall Street Journal Prime Rate minus 25 basis points. This agreement expires on* June 15, 2027.*

At* September 30, 2025*, LCNB had short-term line of credit borrowing arrangements withthree correspondent financial institutions. Under the terms of thefirst arrangement, LCNB can borrow up to $30 million at an interest rate equal to the lending institution’s federal funds rate plus a spread of 50 basis points. Under the terms of thesecond arrangement, LCNB can borrow up to $50 million at an interest rate equal to the FOMC targeted federal funds rate plus a spread of 25 basis points. Under the terms of thethird arrangement, LCNB can borrow up to $25 million at the interest rate in effect at the time of borrowing. At* September 30, 2025*, LCNB hadnot drawn down on any of these borrowing arrangements.

All long-term and short-term advances from the FHLB of Cincinnati are secured by a blanket pledge of LCNB's1-4 familyfirst lien mortgage loans in the amount of approximately $399 million and $410 million at* September 30, 2025* and* December 31, 2024*, respectively. Remaining borrowing capacity with the FHLB of Cincinnati, including both long-term and short-term borrowings, at* September 30, 2025* was approximately $154.7 million.

NOTE9 - LEASES

Lease expenses for offices are included in the consolidated condensed statements of income in net occupancy expense and lease expenses for equipment and ATMs are included in equipment expense. Components of lease expense for thethree andnine months ended* September 30, 2025* and2024 were as follows (in thousands):

Other information related to leases at* September 30, 2025* were as follows (dollars in thousands):

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NOTE10 – INCOME TAXES

A reconciliation between the statutory income tax and LCNB's effective tax rate on income from continuing operations follows:

NOTE11 - COMMITMENTS AND CONTINGENT LIABILITIES

LCNB is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated condensed balance sheets. Exposure to credit loss in the event of nonperformance by the other parties to financial instruments for commitments to extend credit is represented by the contract amount of those instruments.

In addition to such commitments to extend credit, LCNB* mayhave services for customers in place that, though they obligate LCNB to provide credit on certain terms, donot* constitute commitments to extend credit. For example, the Account Protection product, LCNB's deposit overdraft program, is offered as a service by LCNB and doesnot constitute a contract between the customer and LCNB.

LCNB uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

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NOTE11 – COMMITMENTS AND CONTINGENT LIABILITIES** (continued)**

Financial instruments whose contract amounts represent off-balance-sheet credit risk at* September 30, 2025* and* December 31, 2024* were as follows (in thousands):

Commitments to extend credit are agreements to lend to a customer as long as there isno violation of any condition established in the contract. Unused lines of credit include amountsnot drawn on line-of-credit loans. Commitments to extend credit and unused lines of credit generally have fixed expiration dates or other termination clauses.

Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to athird party. These guarantees generally are fully secured and have varying maturities.

LCNB evaluates each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained is based on management's credit evaluation of the borrower and* may*include accounts receivable; inventory, property, plant, and equipment; residential realty; and income-producing commercial properties.

Activity in the allowance for credit losses on off-balance sheet credit exposures, recorded in other liabilities on the consolidated condensed balance sheets, for thethree andnine months ended* September 30, 2025and2024* is as follows (in thousands):

Capital expenditures include the construction or acquisition of new office buildings, improvements to LCNB's offices, purchases of furniture and equipment, and additions or improvements to LCNB's information technology system. Commitments outstanding for capital expenditures as of* September 30, 2025* totaled approximately $126 thousand.

Management believes that LCNB has sufficient liquidity to fund its lending and capital expenditure commitments.

LCNB and its subsidiaries are parties to various claims and proceedings arising in the normal course of business. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from such proceedings and claims willnot be material to LCNB's consolidated financial position or results of operations.

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NOTE12 – ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive loss for thethree andnine months ended* September 30, 2025and2024* were as follows (in thousands):

Reclassifications out of accumulated other comprehensive loss during thethree andnine months ended* September 30, 2025and2024* and the affected line items in the condensed consolidated statements of income were as follows (in thousands):

NOTE13 – RETIREMENT PLANS

LCNB participates in a noncontributory defined benefit multi-employer retirement plan that covers substantially all regular full-time employees hired before* January 1, 2009,on which date the plan was soft-frozen. The plan was then hard-frozen on March 1, 2025,meaning that benefit increasesno* longer accrued to covered employees as of that date. The plan will be unfrozen during thefourth quarter of2025 to allow for amendments that will enhance benefits for active employees currently participating in the plan. The plan will then be refrozen on* November 30, 2025and LCNB will withdraw from the plan by the end of December 2025.Annuity purchases for active employees participating in the plan will occur during thefirst* quarter of2026, finishing LCNB's involvement in the plan.

Employees hired on or after* January 1, 2009receive a 50% employer match on their401*(k) plan contributions, up to a maximum LCNB contribution equal to 3% of each individual employee's annual compensation. Employees hired before this date who received a benefit reduction under certain amendments to the defined benefit retirement plan received an automatic contribution of 5% or 7% of their annual compensation, depending on the sum of an employee's age and vesting service, into their defined contribution plans (401(k) plans), regardless of the contributions made by the employees. These contributions are made annually and these employees didnot receive any employer matches to their401(k) contributions until* March 1, 2025,*at which time they started receiving matches.

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NOTE13 – RETIREMENT PLANS** (continued)**

Funding and administrative costs of the qualified noncontributory defined benefit retirement plan and401(k) plan charged to pension and other employee benefits in the consolidated condensed statements of income for thethree andnine-month period ended* September 30, 2025and2024* were as follows (in thousands):

Certain highly compensated former employees participate in a nonqualified defined benefit retirement plan. The nonqualified plan ensures that participants receive the full amount of benefits to which they would have been entitled under the noncontributory defined benefit retirement plan in the absence of limits on benefit levels imposed by certain sections of the Internal Revenue Code. This plan is limited to the original participants andno new participants have been added.

The net periodic pension cost of the nonqualified defined benefit retirement plan consists solely of interest cost of $19 thousand and $56 thousand for thethree andnine months ended* September 30, 2025* and $18 thousand and $54 thousand for thethree andnine months ended* September 30, 2024*.

NOTE14 – STOCK BASED COMPENSATION

The2025 Ownership Incentive Plan (the*"2025* Plan") was ratified by LCNB Corp.'s shareholders at the annual meeting on* May 19, 2025and allows for stock-based awards to eligible employees and non-employee directors, as determined by the Compensation Committee of the Board of Directors. The2025* Plan replaced the2015 Ownership Incentive Plan (the*"2015* Plan"), which terminated on* April 28, 2025.Awards maybe made in the form of stock options, appreciation rights, restricted shares, and/or restricted share units. The2025* Plan provides for the issuance of up to 600 thousand shares of common stock, where the2015 Plan provided for the issuance of up to 450 thousand shares of common stock. The2025 Plan will terminate on* May**19,* 2035 and could be subject to earlier termination by the Board Compensation Committee.

Stock-based awards* may*be in the form of treasury shares or newly issued shares.

Restricted stock awards granted under the2015 Plan during thenine months ended* September**30,* 2025 and2024 were as follows:

No stock-based awards have been granted under the2025 Plan during the period ended* September**30,* 2025.

At* September 30, 2025*, there were 79,896 restricted stock awards outstanding with an approximate stock value of $1.2 million based on that day's closing stock price. At* September 30, 2024*, there were 84,593 restricted stock awards outstanding with an approximate stock value of $1.3 million based on that day's closing stock price. The fair value of restricted stock awards was $569 thousand on the grant date of* February24,* 2025 and $578 thousand on the grant date of* March4,* 2024. Grants to officers of LCNB vest over a period offive years while grants to members of the board of directors vest immediately. The grant date fair value is recognized ratably into expense over the vesting period.

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NOTE14 – STOCK BASED COMPENSATION** (continued)**

The following table presents expense recorded in salaries and employee benefits for restricted stock awards and the related tax information for thethree andnine months ended* September 30, 2025and2024* (in thousands):

Unrecognized compensation expense for restricted stock awards was $954 thousand at* September 30, 2025* and is expected to be recognized over a period of 3.1 years.

NOTE15 – EARNINGS PER COMMON SHARE

LCNB has granted restricted stock awards with non-forfeitable dividend rights, which are considered participating securities. Accordingly, earnings per share is computed using thetwo-class method as required by ASCNo. 260-10-45. Basic earnings per common share is calculated by dividing net income allocated to common shareholders by the weighted average number of common shares outstanding during the period, which excludes the participating securities. Diluted earnings per common share is adjusted for the dilutive effects of stock options, warrants, and restricted stock. The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options and warrants with proceeds used to purchase treasury shares at the average market price for the period.

Earnings per share for thethree andnine months ended* September 30, 2025and2024* were calculated as follows (dollars in thousands, except share and per share data):

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NOTE16 - FAIR VALUE MEASUREMENTS

LCNB measures certain assets at fair value using various valuation techniques and assumptions, depending on the nature of the asset. Fair value is defined as the price that would be received from the sale of an asset in an orderly transaction between market participants at the measurement date.

The inputs to the valuation techniques used to measure fair value are assigned toone ofthree broad levels:

EQUITY SECURITIES WITH A READILY DETERMINABLE FAIR VALUE

Equity securities with a readily determinable fair value are reported at fair value with changes in fair value reported in other operating income in the consolidated condensed statements of income. Fair values for equity securities are determined based on market quotations (level1). LCNB has an investment in a mutual fund that is measured at fair value using net asset values, which are considered level1 because the net asset values are determined and published and are the basis for current transactions.

DEBT SECURITIES, AVAILABLE-FOR-SALE

The majority of LCNB's financial debt securities are classified as available-for-sale. The securities are reported at fair value with unrealized holding gains and losses reported net of income taxes in accumulated other comprehensive loss. LCNB utilizes a pricing service for determining the fair values of its debt securities. Methods and significant assumptions used to estimate fair value were as follows:

ASSETS RECORDED AT FAIR VALUE ON A NONRECURRING BASIS

Assets that* maybe recorded at fair value on a nonrecurring basis include individually evaluated collateral dependent loans (or impaired loans prior to the adoption of ASC326*), other real estate owned, and other repossessed assets.

LCNB doesnot record loans at fair value on a recurring basis, except for loans held for sale. However, from time to time, nonrecurring fair value adjustments to collateral dependent loans are recorded to reflect partial write-downs or specific reserves that are based on the observable market price or current estimated value of the collateral. These loans are reported in the nonrecurring table below at initial recognition of significant borrower distress and on an ongoing basis until recovery or charge-off. The fair values of distressed loans are determined using either the sales comparison approach or income approach. Respective unobservable inputs for the approaches consist of adjustments for differences between comparable sales and the utilization of appropriate capitalization rates.

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NOTE16 - FAIR VALUE MEASUREMENTS** (continued)**

The following table summarizes the valuation of LCNB's assets recorded at fair value by input levels as of* September 30, 2025* and* December 31, 2024* (in thousands):

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NOTE16 - FAIR VALUE MEASUREMENTS** (continued)**

The following table presents quantitative information about unobservable inputs used in nonrecurring level3 fair value measurements at* September 30, 2025* and* December 31, 2024* (dollars in thousands):

Carrying amounts and estimated fair values of financial instruments as of* September 30, 2025* and* December 31, 2024* were as follows (in thousands):

The methodology to derive the fair value of loans at* September 30, 2025* is consistent with the methodology utilized to determine the fair value of loans acquired in the Company’s recent acquisitions of CNNB and EFBI.

The fair values of off-balance-sheet financial instruments such as loan commitments and letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements. The fair values of such instruments werenot material at* September 30, 2025* or* December 31, 2024*.

Fair values of financial instruments are based on various assumptions, including the discount rate and estimates of future cash flows. Therefore, the fair values presented* may**not* represent amounts that could be realized in actual transactions. In addition, because the required disclosures exclude certain financial instruments and all nonfinancial instruments, any aggregation of the fair value amounts presented wouldnot represent the underlying value of LCNB.

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NOTE17 - SEGMENT INFORMATION

LCNB hasone reportable segment, which is determined by the members of the executive team who, as a group, act as the designated chief operating decision makers. Based upon information provided about LCNB's products and services offered, the reportable segment is primarily banking operations. The segment is also distinguished by the level of information provided to the chief operating decision makers, who use such information to review performance of various components of the business, such as branches, which are then aggregated if operating performance, products and services, and customers are similar. The chief operating decision makers will evaluate the financial performance of LCNB's business components by evaluating revenue streams, significant expenses, and budget to actual results in assessing LCNB's segment and in determining the allocation of resources. The chief operating decision makers use revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The chief operating decision makers use consolidated net income to benchmark LCNB against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessing performance and in establishing compensation. Loans, investments, fiduciary income, and deposit service charges and fees provide the significant revenues in the banking operation. Interest expense, provisions for credit losses, and payroll provide the significant expenses in the banking operation. All operations are domestic.

Accounting policies for the reportable segment are the same as those described in Note1 of Form10-K for the year ended* December 31, 2024.*Segment performance is evaluated using consolidated net income.