LCNB CORP
For the period ended Jun 30, 2026. Filed Aug 5, 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.
Jun 30, 2026 · Filed Aug 5, 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 2026-03-31; filed 2026-05-06.
0001437749-26-015192
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001437749-26-025919
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 56 previous paragraphs and 62 current paragraphs.
38 unchanged; 16 reworded; 4 added; 2 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 33 previous and 17 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
LCNB recorded a provision for credit losses of $276 thousand and $2.6 million for the three and six months ended June 30, 2026, respectively. This compares to a provision for credit losses of $18 thousand and $215 thousand for the same respective three and six month periods in 2025. The provision expense for the six-month period in 2026 was primarily driven by specific reserves related to four participated loans recognized during the first quarter of 2026.
Current report
Non-interest expense for the three and six months ended June 30, 2026 was $15.7 million and $31.6 million, respectively. This compares to non-interest expense of $15.6 million and $31.4 million for the same respective three and six-month periods in 2025. The increase was primarily due to higher salaries and employee benefits, computer maintenance and supplies, and contracted services expenses, largely offset by lower intangible asset amortization, reduced merger-related expenses, and lower FDIC insurance premiums.
Current report
The $502 thousand increase in total interest income was primarily due to a $759 thousand increase in loan interest income. This increase was primarily due to a 13 basis point increase in the average rate earned on the loan portfolio, partially offset by a $13.2 million decrease in average loan balances. Included in the increase in the average loan yield was an $83 thousand increase in accretion income recognized on acquired loans compared to the prior year period. Excluding accretion income in both periods, the average loan yield increased 12 basis points from the prior year period.
Current report
The $4.3 million decrease in total interest expense was primarily due to a $4.2 million decrease in interest expense for IRA and time certificates. This decrease was primarily due to a $134.3 million decrease in average IRA and time certificates and to an 87 basis point decrease in the average rate paid for these certificates. This decrease reflects the strategic runoff of higher-cost certificates and IRA balances as part of LCNB's funding optimization strategy.
Removed paragraphs (2)
Previous 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.
Previous 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.
Reworded paragraphs (16)
Previous 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.
Current wording
Net income for the three and six months ended June 30, 2026 was $7.5 million and $11.9 million, respectively (total basic and diluted earnings per share of $0.53 and $0.84, respectively). This compares to net income of $5.9 million and $10.5 million (total basic and diluted earnings per share of $0.41 and $0.74) for the same respective three and six-month periods in 2025.
Previous 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.
Current wording
Net interest income for the three and six months ended June 30, 2026 was $19.8 million and $38.6 million, respectively. This compares to net interest income of $17.5 million and $33.8 million for the same respective three and six-month periods in 2025. The growth in net interest income was primarily due to an increase in the average yield on earning assets, a reduction in interest-bearing liabilities, and a decrease in the average rate paid on interest-bearing liabilities. LCNB's tax equivalent net interest margin for the three and six-months ended June 30, 2026 was 3.99% and 3.91%, respectively, compared to 3.47% and 3.36% for the same respective periods in 2025.
Previous wording
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 wording
Non-interest income for the three and six months ended June 30, 2026 was $5.4 million and $10.0 million, respectively. This compares to non-interest income of $5.2 million and $10.5 million for the same respective periods in 2025. The decrease during the six-month period 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.
Previous 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.
Current wording
Net interest income on a fully taxable-equivalent basis for the three months ended June 30, 2026 totaled $19.8 million, an increase of $2.2 million from the comparable period in 2025. Total interest expense decreased $1.9 million, with interest income increasing $388 thousand.
Previous 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.
Current wording
The $388 thousand increase in total 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, partially offset by a $12.4 million decrease in average loan balances. The increase in the average loan yield included a $120 thousand increase in accretion income on acquired loans compared to the prior year period. Excluding accretion income in both periods, the average loan yield increased 13 basis points year over year.
Previous 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.
Current wording
The $1.9 million decrease in total interest expense was primarily due to a $114.8 million decrease in average IRA and time certificate deposits and to a 71 basis point decrease in the average rate paid for these deposits. This decrease reflects the strategic runoff of higher-cost certificates and IRA balances as part of LCNB's funding optimization strategy.
Previous 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.
Current wording
LCNB recorded a provision for credit losses of $276 thousand and $2.6 million for the three and six months ended June 30, 2026, compared to $18 thousand and $215 thousand for the same respective periods in 2025. The provision for the three-month period in 2026 included a provision for credit losses on loans of $233 thousand and a provision for off-balance-sheet credit exposures of $43 thousand. The provision for the six-month period in 2026 included a provision for credit losses on loans of $2.6 million and a recovery on off-balance-sheet credit exposures of $16 thousand. The provision for the three-month period in 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 and the provision for the six-month period in 2025 included a provision for credit losses on loans of $226 thousand and a recovery on off-balance-sheet credit exposures of $11 thousand. The provision expense for the six month period in 2026 was primarily driven by credit deterioration identified in four commercial credits during the first quarter of 2026. Specifically, LCNB recorded charge-offs related to two participated logistics-sector loans and established specific reserves on two additional commercial and industrial loans in other industries. While certain borrower-specific challenges affecting the reserved commercial and industrial credits were influenced by global trade uncertainty and geopolitical conditions, management believes those impacts were isolated to the affected borrowers and are not indicative of broader deterioration within the commercial and industrial portfolio. Although management continues to monitor economic, geopolitical and industry-specific developments, current portfolio performance metrics, risk rating trends and other credit quality indicators do not support the need for additional segment-level reserve adjustments beyond those already reflected in the allowance for credit losses. The loan portfolio's overall asset quality remains strong, with nonperforming loans to total loans of 0.34% at June 30, 2026, compared to 0.28% at June 30, 2025.
Previous wording
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.
Current wording
Net recoveries for the three months ended June 30, 2026 totaled $1 thousand and net charge-offs for the six months ended June 30, 2026 totaled $2.7 million, compared to net charge-offs of $79 thousand and $118 thousand for the same respective periods in 2025. Net charge-offs during the six months ended June 30, 2026 primarily reflected the resolution of two unrelated participated loans within the logistics sector. Loans to one borrower, which carried a specific reserve of approximately $1.4 million at December 31, 2025, were charged off during the first quarter with no additional impact to earnings. In addition, LCNB recognized an approximately $1.3 million charge-off during the first quarter of 2026 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. The specific reserves discussed above relate to two separate commercial and industrial credits that remained outstanding at June 30, 2026.
Previous wording
A comparison of non-interest income for the three months ended March 31, 2026 and March 31, 2025 is as follows (in thousands):
Current wording
A comparison of non-interest income for the three and six months ended June 30, 2026 and June 30, 2025 is as follows (in thousands):
Previous wording
A comparison of non-interest expense for the three months ended March 31, 2026 and March 31, 2025 is as follows (in thousands):
Current wording
A comparison of non-interest expense for the three and six months ended June 30, 2026 and June 30, 2025 is as follows (in thousands):
Previous 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.
Current wording
LCNB's effective tax rate for the three and six months ended June 30, 2026 was 18.5% and 17.7%, respectively, compared to 17.8% and 17.2% for the same respective periods 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 64.1% of total loans at March 31, 2026.
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 64.2% of total loans at June 30, 2026.
Previous wording
Qualifications for community banking organizations to use a simplified measure of capital adequacy approach include having a tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. A qualifying community banking organization that opts into the Community Bank Leverage Ratio framework and meets all requirements under the framework will be considered to have met the well-capitalized ratio requirements under the Prompt Corrective Action regulations and will not be required to report or calculate risk-based capital. LCNB did not qualify to use the simplified measure for the March 31, 2026 or December 31, 2025 regulatory capital calculations.
Current wording
Qualifications for community banking organizations to use a simplified measure of capital adequacy approach include having a Tier 1 leverage ratio of greater than 9%, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. A qualifying community banking organization that opts into the Community Bank Leverage Ratio framework and meets all requirements under the framework will be considered to have met the well-capitalized ratio requirements under the Prompt Corrective Action regulations and will not be required to report or calculate risk-based capital. LCNB qualified to use the simplified measure for the June 30, 2026 regulatory capital calculations, but opted not to use this approach. LCNB did not qualify to use the simplified measure for the December 31, 2025 regulatory capital calculations.
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 $38 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 $37 million in off-balance sheet ICS immediately available for liquidity.
Previous 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.
Current wording
Total remaining borrowing capacity with the FHLB at June 30, 2026 was approximately $159.1 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, 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.
Current wording
Commitments to extend credit at June 30, 2026 totaled $305.4 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 requirements.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Six Months Ended June 30, 2026 vs. June 30, 2025
Current report — wording carried from elsewhere
The following table presents, for the six months ended June 30, 2026 and 2025, 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, 2026 as compared to the same period in 2025. 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
Net interest income on a fully taxable-equivalent basis for the six months ended June 30, 2026 totaled $38.7 million, an increase of $4.8 million from the comparable period in 2025. Total interest income increased $502 thousand and total interest expense decreased $4.3 million.