Group 1: Earnings Performance - LCNB reported quarterly earnings of $0.33 per share, missing the Zacks Consensus Estimate of $0.39 per share, but showing an increase from $0.20 per share a year ago, representing an earnings surprise of -15.38% [1] - The company posted revenues of $21.52 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 6.84%, compared to year-ago revenues of $17.82 million [2] - Over the last four quarters, LCNB has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - LCNB shares have lost about 7.7% since the beginning of the year, while the S&P 500 has declined by 12.3% [3] - The current consensus EPS estimate for the coming quarter is $0.40 on $23.6 million in revenues, and for the current fiscal year, it is $1.65 on $95.5 million in revenues [7] - The estimate revisions trend for LCNB is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Banks - Northeast industry, to which LCNB belongs, is currently in the top 25% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

LCNB Corp. Financial Highlights for the Quarter Ended March 31, 2025 [Financial and Operational Highlights (Q1 2025)](index=1&type=section&id=Financial%20and%20Operational%20Highlights%20(Q1%202025)) LCNB Corp. reported Q1 2025 net income of $4.6 million, a significant year-over-year increase, with improved net interest margin Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Income (in thousands) | $4,609 | $6,120 | $1,915 | | Diluted EPS | $0.33 | $0.44 | $0.15 | | Dividends per Share | $0.22 | $0.22 | $0.22 | | Return on Average Assets | 0.81% | 1.04% | 0.34% | | Return on Average Equity | 7.33% | 9.60% | 3.28% | | Net Interest Margin (tax eq.) | 3.25% | 3.22% | 2.72% | - Book value per share increased to **$18.26** at the end of Q1 2025, compared to **$17.92** at the end of Q4 2024 and **$17.67** at the end of Q1 2024[2](index=2&type=chunk) Gross Loan Portfolio Composition (Q1 2025) | Loan Category | Amount (in thousands) | | :--- | :--- | | Commercial, secured by real estate | $1,110,276 | | Residential real estate | $463,379 | | Commercial and industrial | $112,580 | | Consumer | $19,030 | | Agricultural | $13,161 | | **Total Gross Loans** | **$1,717,630** | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) LCNB Corp.'s Q1 2025 balance sheet shows stable total assets, increased deposits and equity, and a significant reduction in long-term debt Balance Sheet Comparison (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $2,302,745 | $2,307,394 | | Loans, net | $1,705,506 | $1,709,811 | | Total Deposits | $1,921,649 | $1,878,292 | | Long-term debt | $104,637 | $155,153 | | Total Shareholders' Equity | $258,651 | $253,036 | - The increase in shareholders' equity was supported by retained earnings growth and a reduction in accumulated other comprehensive loss[10](index=10&type=chunk) [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) Net income more than doubled year-over-year in Q1 2025, driven by increased net interest and non-interest income, alongside reduced interest expense Income Statement YoY Comparison (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $16,299 | $13,895 | | Provision for Credit Losses | $197 | $125 | | Non-Interest Income | $5,222 | $3,929 | | Non-Interest Expense | $15,809 | $15,472 | | **Net Income** | **$4,609** | **$1,915** | | **Diluted EPS** | **$0.33** | **$0.15** | - Total interest expense decreased to **$9.0 million** in Q1 2025 from **$10.9 million** in Q1 2024, largely due to a sharp drop in interest on short-term borrowings from **$935 thousand** to just **$1 thousand**[12](index=12&type=chunk) - Non-interest expense in Q1 2025 did not include any merger-related expenses, which amounted to **$775 thousand** in Q1 2024[12](index=12&type=chunk) [Asset Quality](index=3&type=section&id=Asset%20Quality) Asset quality remained stable in Q1 2025, with a slight increase in nonperforming loans but minimal net charge-offs and a higher allowance for credit losses Key Asset Quality Metrics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Nonperforming loans (in thousands) | $4,891 | $4,618 | $3,243 | | Net charge-offs (in thousands) | $39 | $595 | $45 | | Allowance for credit losses on loans (in thousands) | $12,124 | $12,001 | $10,557 | | Nonperforming loans to total loans | 0.28% | 0.27% | 0.20% | | ACL on loans to total loans | 0.71% | 0.70% | 0.64% | - The provision for credit losses on loans for Q1 2025 was **$162 thousand**, down from **$728 thousand** in the prior quarter but up from **$77 thousand** in Q1 2024[4](index=4&type=chunk) [Net Interest Income Analysis](index=6&type=section&id=Net%20Interest%20Income%20Analysis) The company's net interest margin and spread expanded in Q1 2025, driven by higher asset yields and lower interest-bearing liability rates Net Interest Margin and Spread | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Rate Spread | 2.71% | 2.63% | 2.11% | | Net Interest Margin (tax eq.) | 3.25% | 3.22% | 2.72% | - The average yield on loans increased to **5.46%** in Q1 2025 from **5.30%** in Q1 2024[7](index=7&type=chunk) - The average rate paid on total interest-bearing liabilities decreased to **2.34%** in Q1 2025 from **2.74%** in Q1 2024, primarily due to lower costs on borrowings[7](index=7&type=chunk) [Assets Under Management](index=5&type=section&id=Assets%20Under%20Management) Total assets under management reached $4.16 billion in Q1 2025, showing year-over-year growth driven by trust and brokerage accounts Assets Under Management (in thousands) | Category | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | LCNB Corp. total assets | $2,302,745 | $2,307,394 | $2,283,151 | | Trust and investments (fair value) | $957,359 | $942,249 | $890,800 | | Brokerage accounts (fair value) | $441,621 | $438,310 | $411,211 | | **Total assets managed** | **$4,157,148** | **$4,232,235** | **$3,984,966** |

Loan Portfolio and Credit Losses - Total loans outstanding amounted to $1,721.8 million, with commercial and industrial loans at $118.6 million and residential real estate loans at $457.1 million[94]. - The allowance for credit losses on loans was $12.0 million, representing 0.70% of total loans outstanding, an increase from 0.61% in 2023[95]. - The ratio of the allowance for credit losses to total non-accrual loans was 265.04%, indicating a strong coverage of potential losses[95]. - Approximately 89.4% of LCNB's total commercial loans, or about 64.6% of total loans, are related to commercial real estate, indicating a significant concentration in this sector[107]. - LCNB's loan portfolio includes a substantial amount of commercial and industrial loans, which carry higher financial and credit risks compared to residential loans[106]. - The provision for credit losses is determined based on management's evaluation of the loan portfolio, and increases in the allowance for credit losses can negatively impact earnings[136]. Deposits and Liquidity - Uninsured deposits, including related interest accrued and unpaid, were estimated at $245.8 million as of December 31, 2024, up from $203.9 million in 2023[96]. - The estimated contractual maturities of time deposits exceeding the FDIC insurance limit of $250,000 included $15.9 million maturing within 3 months[97]. - LCNB faces liquidity risk, which could impair its ability to fund operations and capitalize on growth opportunities due to potential difficulties in liquidating assets or obtaining financing[109]. Market and Economic Conditions - The company faces risks related to economic conditions, including potential deterioration in credit quality and increased charge-offs due to economic downturns[100]. - Economic conditions in LCNB's market areas, primarily in Southwestern Ohio, could adversely affect its financial condition, increasing the risk of loan defaults and impacting demand for loans and services[134]. - Economic conditions, including inflation and unemployment, could negatively impact LCNB's financial condition and earnings, particularly affecting loan demand and repayment capabilities[100][101]. - LCNB's earnings are significantly affected by market interest rates, with fluctuations potentially impacting net interest income, a primary source of operational income[125]. - LCNB's future success is dependent on effectively adopting new technology-driven products and services to meet customer demands and improve operational efficiencies[148]. Investment and Securities - The company reported a total of $282.6 million in available-for-sale securities with a weighted average yield of 2.37%[92]. - The fair value of LCNB's investment securities portfolio, primarily available-for-sale, may decline due to factors such as interest rate changes and market volatility, impacting shareholders' equity[138]. - LCNB's investments in equity securities are recorded at fair value, meaning declines will immediately decrease net income[140]. - Municipal securities in LCNB's portfolio may experience value declines due to the financial deterioration of issuers, potentially leading to impairment charges[139]. Regulatory and Compliance Risks - The banking industry is highly regulated, with LCNB subject to oversight by multiple regulatory bodies, which could affect its operations[143]. - Changes in tax laws and accounting standards could materially affect LCNB's operations and reported financial condition[141]. - FDIC deposit insurance assessments increased by two basis points starting in 2023, with potential for further rate increases in the future[147]. Competition and Market Position - LCNB's Wealth Management business is subject to intense competition and is directly affected by conditions in the debt and equity securities markets, which are influenced by factors beyond the company's control[118]. - LCNB's ability to attract and retain customers in a competitive market is crucial for its growth and profitability, as it competes with various financial institutions and non-bank entities[133]. - The emergence of non-bank alternatives may lead to customer disintermediation, resulting in loss of fee income and deposits[149]. Operational Risks - LCNB's reliance on electronic communications and information systems poses risks of interruptions or cyberattacks, which could disrupt operations and impact financial results[113]. - Failure to adopt new technologies may result in customer dissatisfaction, impacting LCNB's growth and revenue[148]. - Climate change poses multi-faceted risks, including operational, credit, and reputational risks, which could significantly impact LCNB's business[150]. - Natural disasters and external events could affect LCNB's deposit stability, borrowers' repayment ability, and overall operational capacity[151]. - Outbreaks of communicable diseases may lead to significant market volatility, business disruptions, and adverse effects on LCNB's financial condition and operations[152].

分组1 - LCNB reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, and showing an increase from $0.34 per share a year ago, resulting in an earnings surprise of 46.67% [1] - The company achieved revenues of $22.7 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.62%, compared to $19.27 million in the same quarter last year [2] - Over the last four quarters, LCNB has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] 分组2 - The stock has gained approximately 1.6% since the beginning of the year, while the S&P 500 has increased by 2.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $22.2 million, and for the current fiscal year, it is $1.75 on revenues of $92.7 million [7] - The Zacks Industry Rank for Banks - Northeast is in the top 6% of over 250 Zacks industries, indicating strong performance potential [8]

Interest Income and Net Interest Income - Interest income for the three months ended December 31, 2024, was $26,894,000, an increase from $23,310,000 for the same period in 2023, representing a growth of 15.8%[2] - Net interest income after provision for credit losses for the twelve months ended December 31, 2024, was $58,833,000, compared to $54,272,000 for the previous year, reflecting an increase of 8.5%[2] - Net interest income for the year ended December 31, 2024, was $60,956 thousand, with a net interest margin of 2.91%[9] - Net interest income for the twelve months ended December 31, 2024, was $60,795 thousand, compared to $56,349 thousand in 2023, reflecting an increase of 7.03%[14] Non-Interest Income - Non-interest income for the three months ended December 31, 2024, was $5,988,000, up from $4,606,000 in the same quarter of 2023, indicating a growth of 30.0%[2] - Non-interest income for the twelve months ended December 31, 2024, reached $20,404 thousand, up from $15,411 thousand in 2023, a growth of 32.51%[14] Credit Losses and Provisions - The provision for credit losses for the three months ended December 31, 2024, was $649,000, compared to $2,218,000 for the same period in 2023, showing a decrease of 70.8%[2] - The provision for credit losses decreased to $1,962 thousand in 2024 from $2,077 thousand in 2023, a reduction of 5.54%[14] - The allowance for credit losses was $11,263 thousand in 2024, up from $8,046 thousand in 2023, reflecting a potential increase in credit risk[9] Net Income and Earnings - The net income for the twelve months ended December 31, 2024, was $13,492,000, an increase from $12,628,000 in 2023, representing a growth of 6.8%[2] - Net income for the twelve months ended December 31, 2024, was $13,492 thousand, compared to $12,628 thousand in 2023, an increase of 6.84%[14] - Basic earnings per share improved to $0.97 in 2024 from $1.10 in 2023, a decrease of 11.82%[14] Efficiency and Ratios - The return on average assets for the three months ended December 31, 2024, was 1.04%, up from 0.15% in the same quarter of 2023[3] - The return on average equity for the three months ended December 31, 2024, was 9.60%, compared to 1.53% for the same period in 2023[3] - The efficiency ratio (tax equivalent) improved to 64.16% for the three months ended December 31, 2024, from 92.19% in the same quarter of 2023[3] - The equity to assets ratio improved to 10.97% from 10.79% in the previous quarter[4] - The adjusted return on average equity for the quarter was 9.68%, compared to 7.60% in the previous quarter[6] Assets and Deposits - Total assets as of December 31, 2024, were $2,307,394 million, a decrease from $2,346,908 million in the previous quarter[6] - Total assets increased to $2,332,087 thousand in 2024 from $2,182,477 thousand in 2023, representing a growth of 6.86%[7] - Total assets increased to $2,307,394 thousand in 2024 from $2,291,592 thousand in 2023, representing a growth of 0.69%[12] - Total deposits decreased to $1,878,292 million from $1,917,005 million in the previous quarter[6] - Total deposits rose to $1,878,292 thousand in 2024, up from $1,824,389 thousand in 2023, an increase of 2.96%[12] Loans and Charge-Offs - The provision for credit losses on loans for the quarter was $728 million, up from $681 million in the prior quarter[4] - Net charge-offs for the quarter were $595 million, compared to $84 million in the previous quarter[5] - Nonperforming loans totaled $4,618 million, up from $3,284 million in the previous quarter[5] - Average loans outstanding rose to $1,765,672 thousand in 2024, with an average yield of 5.46%, compared to $1,467,981 thousand and 4.90% in 2023, indicating a significant increase in both volume and yield[9] - The loans to deposits ratio increased to 91.67% from 89.67% in the previous quarter[4] Expenses and Goodwill - Total non-interest expense for the twelve months ended December 31, 2024, was $63,276 thousand, compared to $54,423 thousand in 2023, an increase of 16.24%[14] - Goodwill increased to $90,310 thousand in 2024 from $79,509 thousand in 2023, reflecting a growth of 13.00%[12]

Financial Performance - Net income for the three and nine months ended September 30, 2024, was $4,532,000 and $7,372,000, respectively, compared to $4,070,000 and $12,921,000 for the same periods in 2023[187]. - Non-interest income for the three and nine months ended September 30, 2024, was $6,407,000 and $14,416,000, respectively, up from $3,578,000 and $10,805,000 in 2023, driven by higher fiduciary income and service charges[190]. - Non-interest expense for the three and nine months ended September 30, 2024, was $15,387,000 and $48,684,000, respectively, compared to $12,244,000 and $36,847,000 in 2023, primarily due to increased personnel and office expenses from acquisitions[191]. - A pretax loss of $843,000 was recorded on the sale of approximately $48.9 million of below market rate loans acquired from Cincinnati Bancorp during the second quarter[190]. Interest Income and Expense - Net interest income for the three and nine months ended September 30, 2024, was $14,970,000 and $44,082,000, respectively, an increase from $13,571,000 and $41,690,000 in 2023, primarily due to higher average loan balances and increased rates[188]. - Total interest income increased by $6,727,000, primarily due to a $6,467,000 increase in loan interest income attributed to a $319.2 million increase in average loan balances[197]. - Total interest expense rose by $5,331,000, driven by a $708,000 increase in interest expense for interest-bearing demand and money market deposits[198]. - Interest expense for IRA and time certificates increased by $4,299,000, due to a $308.0 million increase in average deposit balances and a 121 basis point increase in the average rate paid[198]. - The net interest rate spread decreased to 2.25% from 2.52% in the previous year[194]. Credit Losses - A provision for credit losses of $660,000 and $1,313,000 was recorded for the three and nine months ended September 30, 2024, compared to net recoveries of $114,000 and $141,000 in 2023[189]. - LCNB recorded a provision for credit losses of $660,000 for Q3 2024, compared to a recovery of credit losses of $114,000 for the same period in 2023[211]. - For the nine months ended September 30, 2024, LCNB recorded a provision for credit losses of $1,313,000, compared to a recovery of credit losses of $141,000 for the same period in 2023[211]. - The provision for credit losses on loans during the nine-month 2024 period included $763,000 recognized on non-PCD loans acquired through the EFBI merger[212]. - Net charge-offs for the three and nine months ended September 30, 2024, totaled $84,000 and $147,000, respectively, compared to net charge-offs of $34,000 and $83,000 for the respective periods in 2023[213]. Assets and Deposits - Total assets as of September 30, 2024, were $2,365,676,000, compared to $1,971,269,000 in the previous year[194]. - Total assets increased to $2,346,908,000 as of September 30, 2024, from $2,291,592,000 at December 31, 2023, a difference of $55,316,000, or 2.41%[220]. - Total deposits rose to $1,917,005,000 as of September 30, 2024, from $1,824,389,000 at December 31, 2023, an increase of $92,616,000, or 5.08%[220]. - The increase in average loan and deposit balances during 2024 was attributed to the acquisitions of Eagle Financial Bancorp and Cincinnati Bancorp[188]. Mergers and Acquisitions - LCNB incurred expenses related to the acquisition of Eagle Financial Bancorp on April 12, 2024, and Cincinnati Bancorp on November 1, 2023, impacting net income[187]. - The increase in loan interest income was primarily due to loans acquired in the mergers with EFBI and CNNB[206]. - Goodwill increased primarily due to the merger with EFBI, contributing to a rise in core deposits and intangibles[55]. - Total remaining borrowing capacity with the Federal Home Loan Bank was approximately $120.9 million as of September 30, 2024[236]. Regulatory and Capital Ratios - Regulatory capital ratios as of September 30, 2024: Common Equity Tier 1 Capital to risk-weighted assets at 9.81% and Total Capital at 10.46%[232]. - Management believes that no conditions have occurred that would change LCNB's "well-capitalized" status under regulatory guidelines[231]. Interest Rate Sensitivity - The Bank's interest rate sensitivity analysis indicates that a 100 basis point increase in interest rates would negatively impact net interest income[241]. - The IRSA indicates that a 300 basis point increase in interest rates would result in a decrease of $1,332 thousand in net interest income (NII), representing a decline of 1.75%[242]. - A 200 basis point increase in interest rates would lead to a decrease of $901 thousand in NII, or 1.19%[242]. - The EVE analysis shows that a 300 basis point increase in interest rates would decrease the economic value of equity (EVE) by $36,037 thousand, or 18.50%[243]. Internal Controls and Procedures - LCNB's disclosure controls and procedures were evaluated as effective as of September 30, 2024[245]. - There were no changes in internal control over financial reporting that materially affected LCNB during the reporting period[246]. - LCNB does not use derivatives to hedge interest rate risk and has not entered into market risk instruments for trading purposes[240].

Core Viewpoint - LCNB is positioned as a strong investment opportunity due to its improving earnings outlook and analysts' increasing earnings estimates [1][2][3] Estimate Revisions - The trend of rising earnings estimate revisions reflects growing analyst optimism regarding LCNB's earnings prospects, which is expected to positively influence its stock price [2] - For the current quarter, LCNB is projected to earn $0.30 per share, representing an 11.76% decrease from the previous year, but the Zacks Consensus Estimate has increased by 7.14% over the last 30 days due to one upward revision [4] - For the full year, LCNB is expected to earn $1.09 per share, a 30.13% decline from the prior year, yet the consensus estimate has risen by 9% with one upward revision in the past month [5] Zacks Rank - LCNB currently holds a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts in raising earnings estimates, which historically correlates with stock performance [3][6] - Stocks with a Zacks Rank 1 and 2 have shown significant outperformance compared to the S&P 500 [6] Stock Performance - LCNB's stock has gained 5.3% over the past four weeks, driven by solid estimate revisions and positive earnings growth prospects [7]

Company Performance - LCNB reported quarterly earnings of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.27 per share, but down from $0.37 per share a year ago, representing an earnings surprise of 14.81% [1] - The company posted revenues of $21.38 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.36% and up from $17.15 million year-over-year [1] - Over the last four quarters, LCNB has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [1] Future Outlook - The sustainability of LCNB's stock price movement will depend on management's commentary during the earnings call and the company's earnings outlook [2][3] - The current consensus EPS estimate for the coming quarter is $0.28 on revenues of $21.5 million, and for the current fiscal year, it is $1 on revenues of $82.4 million [4] - The estimate revisions trend for LCNB is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [4] Industry Context - The Banks - Northeast industry, to which LCNB belongs, is currently in the top 23% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [5] - Citizens Financial Services, another bank in the same industry, is expected to report quarterly earnings of $1.38 per share, reflecting a year-over-year decline of 14.3% [5]

Financial Performance - Interest income for the nine months ended September 30, 2024, increased to $78,121,000, up from $56,289,000 for the same period last year, representing a 38.8% growth[1] - Net interest income after provision for credit losses for the three months ended September 30, 2024, was $14,310,000, compared to $13,685,000 for the same period last year, reflecting a 4.6% increase[1] - Non-interest income rose to $6,407,000 for the three months ended September 30, 2024, up from $3,578,000 in the same period last year, marking an increase of 79.5%[1] - Net income for the three months ended September 30, 2024, was $4,532,000, compared to $4,070,000 for the same period last year, showing an increase of 11.4%[1] - Adjusted net income rose to $4,765 million from $4,078 million, reflecting a strong performance[6] - Net income increased to $4,532 million compared to $925 million in the previous quarter, representing a significant increase[6] Asset and Liability Management - Total assets decreased to $2,346,908 million from $2,371,313 million, a decline of approximately 1.03%[5] - Total deposits decreased to $1,917,005 million from $1,943,060 million, a decline of about 1.34%[5] - Total assets increased to $2,365,676 million, up from $1,971,269 million year-over-year[8] - Total assets managed increased to $4,247,253 million from $4,205,498 million, showing growth in asset management[6] - Total liabilities increased to $2,093,662 thousand as of September 30, 2024, from $2,056,289 thousand at December 31, 2023, a rise of about 1.8%[11] Credit Quality - The provision for credit losses was $660,000 for the three months ended September 30, 2024, compared to a recovery of $(114,000) in the same period last year[1] - Nonperforming loans increased to $3,284 million from $3,004 million, indicating a rise in asset quality concerns[5] - The allowance for credit losses was $11,064 million, reflecting an increase from $7,782 million year-over-year[9] Efficiency and Profitability Ratios - Return on average assets for the three months ended September 30, 2024, was 0.76%, up from 0.42% for the same period last year[2] - Return on average equity for the three months ended September 30, 2024, increased to 7.23%, compared to 4.06% for the same period last year[2] - The efficiency ratio (tax equivalent) improved to 71.83% for the three months ended September 30, 2024, down from 83.05% for the same period last year[2] - Adjusted return on average equity improved to 7.60% from 6.72%, reflecting enhanced profitability[6] Capital Position - The equity to assets ratio improved to 10.79% from 10.34%, indicating stronger capital position[5] - Tangible common equity (TCE) increased to $154,728 million from $142,679 million, indicating a stronger equity base[5] Loan and Deposit Metrics - Loans, net as of September 30, 2024, were $1,707,193,000, compared to $1,450,472,000 as of September 30, 2023, indicating a growth of 17.7%[3] - The loans to deposits ratio increased to 89.67% from 89.38%, suggesting a tighter lending environment[5] - Interest earned on loans for the nine months ended September 30, 2024, was $71,860 million, with an average yield of 5.42%[9] - Interest income from loans was $24,342 thousand for the three months ended September 30, 2024, up from $17,875 thousand in the same period last year, indicating a growth of about 36.0%[13] Interest Income and Expenses - The net interest margin on a taxable-equivalent basis was 2.81% for the nine months ended September 30, 2024[9] - Total interest-bearing liabilities amounted to $1,649,368 million, with an interest expense of $11,428 million and an average yield of 2.76%[8] - The ratio of interest-earning assets to interest-bearing liabilities was 127.65%[9] - The company reported a net interest rate spread of 2.22% for the nine months ended September 30, 2024[9] Goodwill and Other Assets - Goodwill increased to $90,209 thousand as of September 30, 2024, from $79,509 thousand at December 31, 2023, reflecting a growth of approximately 13.5%[12] - Cash and cash equivalents increased to $39,374,000 as of September 30, 2024, compared to $32,951,000 as of September 30, 2023, representing a 19.5% increase[2]

Financial Performance - Net income for Q2 2024 was $925,000, down from $4,694,000 in Q2 2023, reflecting the impact of acquisition-related expenses [143]. - Net interest income for Q2 2024 increased to $15,217,000 from $14,177,000 in Q2 2023, driven by higher average loan balances and increased rates [144]. - Non-interest income for Q2 2024 rose to $4,080,000 from $3,646,000 in Q2 2023, primarily due to increased fiduciary income and net gains from residential mortgage loan sales [145]. - Non-interest expense for Q2 2024 was $17,825,000, up from $12,078,000 in Q2 2023, largely due to costs associated with acquisitions and additional personnel [146]. - The effective tax rate for Q2 2024 was 2.0%, significantly lower than 17.9% for the same period in 2023, primarily due to tax-exempt interest income and other tax-exempt earnings [170]. - LCNB recorded a provision for credit losses of $528,000 for Q2 2024, compared to $30,000 for the same period in 2023, reflecting a significant increase in credit loss provisions [163]. - Total non-interest expense for Q2 2024 was $17,825,000, an increase of $5,747,000 from $12,078,000 in Q2 2023, largely due to increased salaries and employee benefits and merger-related expenses [168]. Acquisitions and Mergers - The company completed the acquisition of Eagle Financial Bancorp on April 12, 2024, and Cincinnati Bancorp on November 1, 2023, impacting financial results [143]. - Average loan and deposit balances increased in 2024 due to the acquisitions of EFBI and CNNB [144]. - LCNB recorded an $843,000 pretax loss on the sale of approximately $48.9 million of below-market rate loans acquired from Cincinnati Bancorp [145]. - The increase in loan interest income was attributed to organic growth and loans acquired from mergers with EFBI and CNNB, contributing to the overall growth in the loan portfolio [159]. - Total deposits increased by $118,671 thousand, or 6.50%, primarily due to deposits acquired through the merger with EFBI and organic growth [173]. - Common shares increased by $13,558 thousand, or 7.81%, primarily due to stock issued as part of the acquisition price for EFBI [173]. Credit Losses and Provisions - Provision for credit losses for Q2 2024 was $528,000, significantly higher than $30,000 in Q2 2023, including $763,000 from non-PCD loans acquired in the Eagle Financial Bancorp merger [145]. - The total provision for credit losses for the six months ended June 30, 2024, was $653,000, compared to a net recovery of $27,000 for the same period in 2023, indicating a shift towards recognizing potential credit losses [163]. - Net charge-offs for the three and six months ended June 30, 2024 totaled $18,000 and $63,000, respectively, compared to $33,000 and $49,000 for the same periods in 2023 [165]. Interest Income and Expenses - Total interest income increased by $15,086,000, primarily due to a $14,612,000 increase in loan interest income driven by a $372.7 million increase in average loan balances and a 65 basis point increase in the average rate earned on the loan portfolio [159]. - Total interest expense rose by $14,109,000, mainly due to a $4,650,000 increase in interest expense for interest-bearing demand and money market deposits, a $7,199,000 increase for IRA and time certificates, and a $3,216,000 increase for long-term debt [160]. - The average yield on loans increased to 5.40% in 2024 from 4.75% in 2023, reflecting a 71 basis point rise due to higher market rates [155]. - The net interest rate spread decreased to 2.19% for the six months ended June 30, 2024, compared to 2.87% for the same period in 2023 [155]. Assets and Liabilities - Total assets as of June 30, 2024, were $2,349,775,000, up from $1,925,005,000 in 2023 [155]. - Long-term debt increased by $49,027 thousand, or 43.34%, due to additional advances from the FHLB of Cincinnati [173]. - Goodwill increased by $14,413 thousand, or 18.13%, primarily due to additional goodwill recognized from the EFBI acquisition [172]. - The ratio of interest-earning assets to interest-bearing liabilities was 127.82% for the six months ended June 30, 2024, down from 141.46% in 2023 [155]. Liquidity and Risk Management - Management believes LCNB has adequate liquidity to meet short and long-term requirements without operational problems [185]. - The bank's liquidity management ensures cash is available for borrowers, depositors, and operational needs [182]. - LCNB does not use derivatives to hedge interest rate risk and has not entered into any market risk instruments for trading purposes [188]. - The Interest Rate Sensitivity Analysis (IRSA) indicates that a 300 basis point increase in interest rates would result in a decrease of $2.453 million (3.27%) in net interest income (NII) [189]. - The Economic Value of Equity (EVE) analysis shows that a 300 basis point increase in interest rates would lead to a decrease of $29.094 million (18.32%) in EVE [190]. Regulatory and Legal Matters - No changes in internal control over financial reporting have materially affected LCNB's internal controls during the reporting period [193]. - LCNB is not involved in any material pending legal proceedings, aside from routine litigation incidental to its business [195].