LCNB CORP
For the period ended Mar 31, 2026. Filed May 6, 2026.
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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.
Mar 31, 2026 · Filed May 6, 2026
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 2025-09-30; filed 2025-11-05.
0001437749-25-033333
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001437749-26-015192
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 65 previous paragraphs and 56 current paragraphs.
33 unchanged; 18 reworded; 5 added; 9 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 40 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 (5)
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.
Current report
Net charge‑offs during the first quarter of 2026 primarily reflected the resolution of two unrelated credits within the logistics sector, an industry that has experienced elevated stress in recent periods across the broader economy. One of these loans, which carried a specific reserve of approximately $1.4 million at December 31, 2025, was charged off during the quarter with no additional impact to earnings, consistent with the Company’s prior disclosures. In addition, the Company recognized a charge‑off of approximately $1.3 million related to a separate logistics‑sector borrower following adverse developments subsequent to year‑end.
Current report
Non-interest income for the three months ended March 31, 2026 was $4.7 million, compared to non-interest income of $5.2 million for the same period in 2025. The decrease was primarily due to lower net gains from sales of loans and lower service charges and fees recognized on deposit accounts, partially offset by higher fiduciary income.
Current report
Non-interest expense for the three months ended March 31, 2026 was $15.9 million, compared to non-interest expense of $15.8 million for the same three-month period in 2025. Salaries and employee benefits increased during the 2026 period, largely offset by a decrease in FDIC insurance premiums.
Current report
Net charge-offs for the three months ended March 31, 2026 totaled $2.7 million, compared to net charge-offs of $39 thousand for the same period in 2025. Net charge‑offs during the first quarter of 2026 primarily reflected the resolution of participation loans to two unrelated borrowers within the logistics sector. Loans to one of the borrowers, which carried a specific reserve of approximately $1.4 million at December 31, 2025, was charged off during the quarter with no additional impact to earnings, consistent with LCNB's prior disclosures. In addition, LCNB recognized an additional charge‑off during the first quarter 2026 of approximately $1.3 million related to a separate logistics‑sector borrower after significant adverse developments arose subsequent to year‑end, including the withdrawal of the borrower’s sponsor from restructuring discussions and the acceptance by the lending group of a discounted debt‑repurchase proposal.
Removed paragraphs (9)
Previous report
Business Combinations. Assets acquired, including identified intangible assets such as core deposit intangibles and liabilities assumed as a result of a merger or acquisition transaction, are recorded at their estimated fair values. The difference between the consideration paid and the net fair value of assets acquired and liabilities assumed is recorded as goodwill. Management engages third-party specialists to assist in the development of fair value estimates. Significant estimates and assumptions used to value acquired assets and liabilities assumed include, but are not limited to, projected cash flows, future growth rates, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. The allowance for credit losses for PCD loans is recognized within acquisition accounting. Under current guidance, the allowance for credit losses for non-PCD assets is recognized as a provision for credit losses in the same reporting period as the merger or acquisition. Fair value adjustments are amortized or accreted into the income statement over the estimated lives of the acquired assets and assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the merger or acquisition.
Previous report
Preliminary estimates of fair values may be adjusted for a period of time no greater than one year subsequent to the merger or acquisition date if new information is obtained about facts and circumstances that existed as of the merger or acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Adjustments recorded during this period are recognized in the current reporting period.
Previous report
LCNB recorded a provision for credit losses of $211 thousand and $426 thousand for the three and nine months ended September 30, 2025. This compares to a provision of $660 thousand and $1.3 million for the same three and nine-month periods in 2024. The provisions for the nine-month period in 2024 included $763 thousand recognized on non-PCD loans acquired through the EFBI merger.
Previous report
Non-interest income for the three and nine months ended September 30, 2025 was $5.7 million and $16.2 million, respectively. This compares to non-interest income of $6.4 million and $14.4 million for the same periods in 2024. The increase for the nine-month period was primarily due to higher fiduciary income, service charges and fees on deposit accounts, and other income. Partially offsetting non-interest income during the nine months ended September 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 report
Non-interest expense for the three and nine months ended September 30, 2025 was $15.1 million and $46.5 million, respectively. This compares to non-interest expense of $15.4 million and $48.7 million for the same three and nine-month periods in 2024. The decreases were primarily due to lower merger related expenses. LCNB had $281 thousand and $3.4 million of one-time merger-related expenses that occurred during the three and nine months ended September 30 2024, respectively, compared to $140 thousand of such expenses for the nine months ended September 30, 2025.
Previous report
The $557 thousand decrease in total interest income was primarily due to a $678 thousand decrease in loan interest income. The decrease in loan interest income was primarily due to a $54.7 million decrease in average loan balances, partially offset by a 13 basis point increase in the average rate earned on the loan portfolio.
Previous report
The $8.4 million decrease in total interest expense was primarily due to a $104.1 million decrease in average interest-bearing liabilities and to a 54 basis point decrease in the average rate paid for these liabilities.
Previous report
The provisions for credit losses on loans during the nine-month 2024 period included $763,000 recognized on non-PCD loans acquired through the EFBI merger and 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 due to a decrease in loss rates and a decrease in loan balances caused by a transfer to the loans held-for-sale category.
Previous report
Net charge-offs for the three and nine months ended September 30, 2025 totaled $169 thousand and $287 thousand, respectively, compared to net charge-offs of $84 thousand and $147 thousand for the same respective periods in 2024.
Reworded paragraphs (18)
Previous 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 as an 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.
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
See Note 1- Basis of Presentation - Adoption of New Accounting Pronouncements in the 2024 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 Quarterly Report on Form 10-Q for further information regarding LCNB's loan portfolio and allowance.
Current wording
See Note 1 - Summary of Significant Accounting Policies - Allowance for Credit Losses on Loans in the 2025 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 Quarterly Report on Form 10-Q for further information regarding LCNB's loan portfolio and allowance.
Previous wording
Fair Value Accounting for Debt Securities. Debt securities classified as available-for-sale are recorded at fair value with unrealized gains and losses recorded in other comprehensive income, net of tax. Available-for-sale debt securities in unrealized loss positions are evaluated to determine if the decline in fair value should be recorded in income or in other comprehensive income (loss). LCNB first determines if it intends to sell or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through income. If neither of these criteria is met, LCNB evaluates whether the decline in fair value resulted from credit factors. In making this determination, management considers, among other factors, the extent to which fair value is less than the amortized cost basis, any changes to the rating of the security by rating agencies, and any adverse conditions specifically related to the security or issuer. If the present value of cash flows expected to be collected is less than the amortized cost basis, a provision is recorded to the allowance for credit losses. Any decline in fair value not recorded through an allowance for credit losses is recognized in accumulated other comprehensive income, net of applicable taxes.
Current wording
Fair Value Accounting for Debt Securities. Debt securities classified as available-for-sale are recorded at fair value with unrealized gains and losses recorded in other comprehensive income (loss), net of tax. Available-for-sale debt securities in unrealized loss positions are evaluated to determine if the decline in fair value should be recorded in income or in other comprehensive income (loss). LCNB first determines if it intends to sell or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through income. If neither of these criteria is met, LCNB evaluates whether the decline in fair value resulted from credit factors. In making this determination, management considers, among other factors, the extent to which fair value is less than the amortized cost basis, any changes to the rating of the security by rating agencies, and any adverse conditions specifically related to the security or issuer. If the present value of cash flows expected to be collected is less than the amortized cost basis, a provision is recorded to the allowance for credit losses. Any decline in fair value not recorded through an allowance for credit losses is recognized in accumulated other comprehensive income (loss), net of applicable taxes.
Previous wording
Net income for the respective three and nine months ended September 30, 2025 was $6.9 million (total basic and diluted earnings per share of $0.49) and $17.5 million (total basic and diluted earnings per share of $1.23). This compares to net income of $4.5 million (total basic and diluted earnings per share of $0.31) and $7.4 million (total basic and diluted earnings per share of $0.53) for the same three and nine-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.
Current wording
Net income for the three months ended March 31, 2026 was $4.4 million (total basic and diluted earnings per share of $0.31). This compares to net income of $4.6 million (total basic and diluted earnings per share of $0.33) for the same three-month periods in 2025.
Previous wording
Net interest income for the three and nine months ended September 30, 2025 was $18.1 million and $52.0 million, respectively. This compares to net interest income of $15.0 million and $44.1 million for the same three and nine-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 nine months of 2025 was 3.43%, compared to 2.81% for the same period last year.
Current wording
Net interest income for the three months ended March 31, 2026 was $18.8 million, compared to net interest income of $16.3 million for the same three-month periods in 2025. 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, along with an increase in the average rate earned on LCNB's loan portfolio. LCNB's tax equivalent net interest margin for the first three months of 2026 was 3.83%, compared to 3.25% for the same period last year.
Previous wording
Net interest income on a fully taxable-equivalent basis for the nine months ended September 30, 2025 totaled $52.1 million, an increase of $7.9 million from the comparable period in 2024. Total interest income decreased $557 thousand and total interest expense decreased $8.4 million.
Current wording
Net interest income on a fully taxable-equivalent basis for the three months ended March 31, 2026 totaled $18.9 million, an increase of $2.6 million from the comparable period in 2025. Total interest expense decreased $2.4 million, with interest income increasing $114 thousand.
Previous wording
The $93 thousand decrease in total interest income was primarily due to a $179 thousand decrease in loan interest income due to a $64.0 million decrease in average loan balances, partially offset by a 15 basis point (a basis point equals 0.01%) increase in the average rate earned on the loan portfolio.
Current wording
The $114 thousand increase in total interest income was primarily due to a 10 basis point (a basis point equals 0.01%) increase in the average rate earned on the loan portfolio, partially offset by a $13.9 million decrease in average loan balances.
Previous wording
The $3.2 million decrease in total interest expense was primarily due to a $125.6 million decrease in average interest-bearing liabilities and to a 63 basis point decrease in the average rate paid for these liabilities.
Current wording
The $2.4 million decrease in total interest expense was primarily due to a $154.1 million decrease in average IRA and time certificate deposits and to a 102 basis point decrease in the average rate paid for these deposits.
Previous wording
LCNB continuously reviews the loan portfolio for credit risk through the use of its lending and loan review functions. Independent loan reviews analyze specific loans, providing validation that credit risks are appropriately identified, graded, and reported to the Loan Committee, Board of Directors, and the Audit Committee of the Board of Directors. New credits meeting specific criteria are analyzed prior to origination and are reviewed by the Loan Committee, the Loan Committee of the Board of Directors, and the Board of Directors.
Current wording
LCNB continuously reviews the loan portfolio for credit risk through the use of its lending and loan review functions. Independent loan reviews analyze specific loans, providing validation that credit risks are appropriately identified, graded, and reported to the Loan Committee, Board of Directors, and the Audit Committee. New credits meeting specific criteria are analyzed prior to origination and are reviewed by the Loan Committee and the Board of Directors.
Previous wording
The total provision for credit losses is determined based upon management's evaluation as to the amount needed to maintain the allowance for credit losses at a level considered appropriate in relation to the risk of losses inherent in the portfolio. For analysis purposes, the loan portfolio is separated into pools of similar loans. These pools include commercial and industrial loans, owner occupied commercial real estate loans, non-owner occupied commercial real estate loans, real estate loans secured by farms, real estate loans secured by multi-family dwellings, residential real estate loans secured by senior liens on 1-4 family dwellings, residential real estate loans secured by junior liens on 1-4 family dwellings, home equity line of credit loans, consumer loans, loans for agricultural purposes not secured by real estate, construction loans secured by 1-4 family dwellings, construction loans secured by other real estate, and several smaller classifications. Within each pool of loans, LCNB examines a variety of factors to determine the adequacy of the allowance for credit losses, including historic charge-off percentages, overall pool quality, a review of specific problem loans, current economic trends and conditions that may affect borrowers' ability to pay, and the nature, volume, and consistency of the loan pool.
Current wording
The total provision for credit losses is determined based upon management's evaluation as to the amount needed to maintain the allowance for credit losses at a level considered appropriate in relation to the risk of losses inherent in the portfolio. For analysis purposes, the loan portfolio is separated into pools of similar loans. These pools include commercial and industrial loans, owner occupied commercial real estate loans, non-owner occupied commercial real estate loans, real estate loans secured by farms, real estate loans secured by multi-family dwellings, residential real estate loans secured by senior liens on 1-4 family dwellings, residential real estate loans secured by junior liens on 1-4 family dwellings, home equity line of credit loans, consumer loans, loans for agricultural purposes not secured by real estate, construction loans secured by 1-4 family dwellings, construction loans secured by other real estate, and several smaller classifications. Within each pool of loans, LCNB examines a variety of factors to determine the adequacy of the allowance for credit losses, including historic charge-off percentages, overall pool quality, a review of specific problem loans, current economic trends and conditions that may affect borrowers' ability to pay, and the nature, volume, and consistency of the loan pool. 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 or if market conditions change.
Previous wording
LCNB recorded a provision for credit losses of $211 thousand for the third quarter of 2025, compared to $660 thousand for the comparable period in 2024. The provision for the 2025 period included a provision for credit losses on loans of $231 thousand and a recovery on off-balance-sheet credit exposures of $26 thousand. The provision for the 2024 period included a provision for credit losses on loans of $681 thousand and a net recovery for off-balance-sheet credit exposures of $21 thousand. For the nine months ended September 30, 2025, LCNB recorded a provision for credit losses of $426 thousand, compared to a provision of $1.3 million for the comparable period in 2024. The provision for the nine months ended September 30, 2025 included a provision for credit losses on loans of $457 thousand and a recovery on off-balance-sheet credit exposures of $37 thousand. The provision for the 2024 nine-month period included a provision for credit losses on loans of $1.3 million and a provision for off-balance-sheet credit exposures of $11 thousand.
Current wording
LCNB recorded a provision for credit losses of $2.3 million for the first quarter of 2026, compared to $197 thousand for the comparable period in 2025. The provision for the 2026 period included a provision for credit losses on loans of $2.4 million and a recovery on off-balance-sheet credit exposures of $59 thousand. 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 expense for the first quarter of 2026 was primarily driven by specific reserves related to three participated loans. One logistics-related loan was reserved for and charged‑off during the quarter and specific reserves were included on two commercial and industrial loans in other industries impacted by continued global trade uncertainty and geopolitical conditions. The loan portfolio's overall asset quality remains strong, with nonperforming loans to total loans of 0.19% at March 31, 2026, compared to 0.28% at March 31, 2025.
Previous wording
A comparison of non-interest income for the three and nine months ended September 30, 2025 and September 30, 2024 is as follows (in thousands):
Current wording
A comparison of non-interest income for the three months ended March 31, 2026 and March 31, 2025 is as follows (in thousands):
Previous wording
A comparison of non-interest expense for the three and nine months ended September 30, 2025 and September 30, 2024 is as follows (in thousands):
Current wording
A comparison of non-interest expense for the three months ended March 31, 2026 and March 31, 2025 is as follows (in thousands):
Previous wording
LCNB's effective tax rate for the three and nine months ended September 30, 2025 was 18.2% and 17.6%, respectively, compared to 15.0% and 13.3% 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.
Current wording
LCNB's effective tax rate for the three months ended March 31, 2026 was 16.5%, compared to 16.4% for the same period in 2025. 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.
Previous wording
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 65% of total loans at September 30, 2025.
Current wording
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 64.1% of total loans at March 31, 2026.
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 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. In addition, LCNB has approximately $71.2 million in off-balance sheet ICS 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 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. In addition, LCNB has approximately $38 million in off-balance sheet ICS immediately available for liquidity.
Previous wording
Total remaining borrowing capacity with the FHLB at September 30, 2025 was approximately $154.7 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 FHLB at March 31, 2026 was approximately $154.1 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 September 30, 2025 totaled $273.0 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 March 31, 2026 totaled $288.7 million and are more fully described in Note 10 - 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 previous paragraphs (5)
Previous report — wording carried elsewhere
Net interest income on a fully taxable-equivalent basis for the three months ended September 30, 2025 totaled $18.2 million, an increase of $3.2 million from the comparable period in 2024. Total interest expense decreased $3.2 million, slightly offset by a $93 thousand decrease in total interest income.
Previous report — wording carried elsewhere
Nine Months Ended September 30, 2025 vs. September 30, 2024
Previous report — wording carried elsewhere
The following table presents, for the nine months ended September 30, 2025 and September 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.
Previous report — wording carried 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 nine months ended September 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.
Previous report — wording carried elsewhere
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 or if market conditions change.