10q10k10q10k.net

What changed in LCNB CORP's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of LCNB CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+185 added−184 removedSource: 10-K (2026-03-11) vs 10-K (2025-03-12)

Top changes in LCNB CORP's 2025 10-K

185 paragraphs added · 184 removed · 134 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

30 edited+21 added−5 removed122 unchanged
Biggest changeAND SUBSIDIARIES Loan Portfolio The following table summarizes loan maturities and sensitivities to interest rate change at December 31, 2024 (in thousands): Commercial, Commercial Secured by Residential & Industrial Real Estate Real Estate Consumer Agricultural Other Totals Maturing in one year or less $ 24,339 71,187 4,990 1,842 9,486 179 112,023 Maturing after one year through five years 69,550 148,425 15,188 13,797 2,294 — 249,254 Maturing after five years through 15 years 24,722 452,340 117,823 4,859 1,513 — 601,257 Maturing after 15 years — 440,180 319,098 — — — 759,278 Totals $ 118,611 1,112,132 457,099 20,498 13,293 179 1,721,812 Loans maturing beyond one year: Fixed rate $ 41,945 342,195 219,630 18,656 2,332 — 624,758 Variable rate 52,327 698,750 232,479 — 1,475 — 985,031 Totals $ 94,272 1,040,945 452,109 18,656 3,807 — 1,609,789 Allocation of the Allowance for Credit Losses on Loans The following table presents the allocation of the allowance for credit losses on loans: At December 31, 2024 2023 2022 Percent Percent Percent of Loans of Loans of Loans in Each in Each in Each Category Category Category to Total to Total to Total Amount Loans Amount Loans Amount Loans (Dollars in thousands) Commercial and industrial $ 1,573 6.9 % 1,039 7.0 % 1,300 8.6 % Commercial, secured by real estate 6,537 64.6 % 5,414 64.3 % 3,609 66.9 % Residential real estate 3,634 26.5 % 3,816 26.6 % 624 21.8 % Consumer 220 1.2 % 238 1.5 % 86 2.0 % Agricultural 24 0.8 % 18 0.6 % 22 0.7 % Other loans, including deposit overdrafts 13 — % — — % 5 — % Total $ 12,001 100.0 % 10,525 100.0 % 5,646 100.0 % Ratio of the allowance for credit losses to total loans outstanding 0.70% 0.61 % 0.40 % Ratio of the allowance for credit losses to total non-accrual loans 265.04% 13,090.42 % 1,443.99 % Deposits The statistical information regarding average amounts and average rates paid for the deposit categories is included in the "Distribution of Assets, Liabilities and Shareholders' Equity" table included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
Biggest changeAND SUBSIDIARIES Loan Portfolio The following table summarizes loan maturities and sensitivities to interest rate change at December 31, 2025 (in thousands): Commercial, Commercial Secured by Residential & Industrial Real Estate Real Estate Consumer Agricultural Other Totals Maturing in one year or less $ 25,735 76,139 5,863 1,649 13,046 210 122,642 Maturing after one year through five years 61,106 179,222 14,510 12,250 1,404 — 268,492 Maturing after five years through 15 years 17,264 454,793 114,075 3,056 1,249 — 590,437 Maturing after 15 years — 388,057 335,903 — — — 723,960 Totals $ 104,105 1,098,211 470,351 16,955 15,699 210 1,705,531 Loans maturing beyond one year: Fixed rate $ 33,378 289,704 208,900 15,306 1,825 — 549,113 Variable rate 44,992 732,368 255,588 — 828 — 1,033,776 Totals $ 78,370 1,022,072 464,488 15,306 2,653 — 1,582,889 Allocation of the Allowance for Credit Losses on Loans The following table presents the allocation of the allowance for credit losses on loans: At December 31, 2025 2024 2023 Percent Percent Percent of Loans of Loans of Loans in Each in Each in Each Category Category Category to Total to Total to Total Amount Loans Amount Loans Amount Loans (Dollars in thousands) Commercial and industrial $ 2,463 6.1 % 1,573 6.9 % 1,039 7.0 % Commercial, secured by real estate 6,514 64.4 % 6,537 64.6 % 5,414 64.3 % Residential real estate 4,492 27.6 % 3,634 26.5 % 3,816 26.6 % Consumer 188 1.0 % 220 1.2 % 238 1.5 % Agricultural 30 0.9 % 24 0.8 % 18 0.6 % Other loans, including deposit overdrafts 17 — % 13 — % — — % Total $ 13,704 100.0 % 12,001 100.0 % 10,525 100.0 % Ratio of the allowance for credit losses to total loans outstanding 0.80% 0.70 % 0.61 % Ratio of the allowance for credit losses to total non-accrual loans 763.88% 265.04 % 13,090.42 % Deposits The statistical information regarding average amounts and average rates paid for the deposit categories is included in the "Distribution of Assets, Liabilities and Shareholders' Equity" table included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
United States trade relations with foreign countries could negatively impact the financial condition of LCNB's customers, which could adversely affect LCNB 's operating results and financial condition; 10. global and/or geopolitical relations and/or conflicts could create financial market uncertainty and have negative impacts on commodities, currency, and stability, which could adversely affect LCNB's operating results and financial condition; 11. difficulties with technology or data security breaches, including cyberattacks or widespread outages, could negatively affect LCNB's ability to conduct business and its relationships with customers, vendors, and others; 12. adverse weather events and natural disasters and global and/or national epidemics could negatively affect LCNB's customers given its concentrated geographic scope, which could impact LCNB's operating results; and 13. government intervention in the U.S. financial system, including the effects of legislative, tax, accounting, and regulatory actions and reforms, including the Jumpstart Our Business Startups Act, the Consumer Financial Protection Bureau, the capital ratios of Basel III as adopted by the federal banking authorities, changes in deposit insurance premium levels, and any such future regulatory actions or reforms.
United States trade relations with foreign countries could negatively impact the financial condition of LCNB's customers, which could adversely affect LCNB's operating results and financial condition; 10. global and/or geopolitical relations and/or conflicts could create financial market uncertainty and have negative impacts on commodities, currency, and stability, which could adversely affect LCNB's operating results and financial condition; 11. difficulties with technology or data security breaches, including cyberattacks or widespread outages, could negatively affect LCNB's ability to conduct business and its relationships with customers, vendors, and others; 12. adverse weather events and natural disasters and global and/or national epidemics could negatively affect LCNB's customers given its concentrated geographic scope, which could impact LCNB's operating results; and 13. government intervention in the U.S. financial system, including the effects of legislative, tax, accounting, and regulatory actions and reforms, including the Jumpstart Our Business Startups Act, the Consumer Financial Protection Bureau, the capital ratios of Basel III as adopted by the federal banking authorities, changes in deposit insurance premium levels, and any such future regulatory actions or reforms.
The Bank seeks to minimize the competitive effect of other financial institutions through a community banking approach that emphasizes direct customer access to the Bank's CEO and other officers in an environment conducive to friendly, informed, and courteous personal services. Management believes that the Bank is well-positioned to compete successfully in its primary market area.
The Bank seeks to minimize the competitive effect of other financial institutions through a community banking approach that emphasizes direct customer access to the Bank's CEO, President, and other officers in an environment conducive to friendly, informed, and courteous personal services. Management believes that the Bank is well-positioned to compete successfully in its primary market area.
LCNB places a high priority on training and development and has enjoyed a long history of promoting from within the organization, as evidenced by the executive management team. Through a blend of strong internal talent and diverse new talent, the Bank has been able to successfully navigate the ongoing challenges related to talent depth.
LCNB places a high priority on training and development and has enjoyed a long history of promoting from within the organization, as evidenced by the executive management team. Through a blend of strong internal talent and new talent, the Bank has been able to successfully navigate the ongoing challenges related to talent depth.
Certain provisions affecting LCNB include: • Simplifying regulatory capital requirements by providing that banks with less than $10 billion in total consolidated assets that meet a to-be-developed community bank leverage ratio of tangible equity to average consolidated assets between eight and ten percent will be deemed to be in compliance with risk-based capital and leverage requirements. • Changing how federal financial institution regulators classify certain municipal securities assets under the liquidity coverage ratio rule; • Exempting certain reciprocal deposits from treatment as brokered deposits under the FDIC's brokered deposits rule; • Exempting banks with less than $10 billion in total consolidated assets from certain provisions under the Volcker Rule; and • Authorizing new banking procedures to better facilitate online transactions. -11- Table of Contents LCNB CORP.
Certain provisions affecting LCNB include: • Simplifying regulatory capital requirements by providing that banks with less than $10 billion in total consolidated assets that meet a to-be-developed community bank leverage ratio of tangible equity to average consolidated assets between eight and ten percent will be deemed to be in compliance with risk-based capital and leverage requirements. • Changing how federal financial institution regulators classify certain municipal securities assets under the liquidity coverage ratio rule; • Exempting certain reciprocal deposits from treatment as brokered deposits under the FDIC's brokered deposits rule; • Exempting banks with less than $10 billion in total consolidated assets from certain provisions under the Volcker Rule; and • Authorizing new banking procedures to better facilitate online transactions. -12- Table of Contents LCNB CORP.
At this time, LCNB and the Bank do not expect material costs and effects to result from any federal, state, or local environmental laws that may be enacted. -12- Table of Contents LCNB CORP.
At this time, LCNB and the Bank do not expect material costs and effects to result from any federal, state, or local environmental laws that may be enacted. -13- Table of Contents LCNB CORP.
The Bank competes with other national and state banks, savings and loan associations, credit unions, finance companies, mortgage brokerage firms, realty companies with captive mortgage brokerage firms, mutual funds, insurance companies, brokerage and investment banking companies, Financial Technology or "FinTech" companies, and other financial intermediaries operating in its market and elsewhere, many of whom have substantially larger financial and managerial resources.
The Bank competes with other national and state banks, savings and loan associations, credit unions, finance companies, mortgage brokerage firms, realty companies with captive mortgage brokerage firms, mutual funds, insurance companies, cryptocurrency companies, brokerage and investment banking companies, Financial Technology or "FinTech" companies including decentralized finance and cryptocurrency, and other financial intermediaries operating in its market and elsewhere, many of whom have substantially larger financial and managerial resources.
LCNB’s ability to integrate recent and future acquisitions, including CNNB and EFBI, may be unsuccessful, or may be more difficult, time-consuming, or costly than expected; 3. LCNB may incur increased loan charge-offs in the future and the allowance for credit losses may be inadequate; 4.
LCNB’s ability to integrate recent and future acquisitions may be unsuccessful, or may be more difficult, time-consuming, or costly than expected; 3. LCNB may incur increased loan charge-offs in the future and the allowance for credit losses may be inadequate; 4.
The table analyzing changes in interest income and expense by volume and rate is included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. -14- Table of Contents LCNB CORP. AND SUBSIDIARIES Contractual maturities of debt securities at December 31, 2024, were as follows.
The table analyzing changes in interest income and expense by volume and rate is included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. -15- Table of Contents LCNB CORP. AND SUBSIDIARIES Contractual maturities of debt securities at December 31, 2025, were as follows.
Government Agencies, there were no investments in securities of any issuer that exceeded 10% of LCNB's consolidated shareholders' equity at December 31, 2024. -15- Table of Contents LCNB CORP.
Government Agencies, there were no investments in securities of any issuer that exceeded 10% of LCNB's consolidated shareholders' equity at December 31, 2025. -16- Table of Contents LCNB CORP.
Under current regulations, the Bank was “well capitalized” as of December 31, 2024.
Under current regulations, the Bank was “well capitalized” as of December 31, 2025.
Copies of these reports are available free of charge in the shareholder information section of the Bank's website, www.lcnb.com, as soon as reasonably practicable after they are electronically filed or furnished to the SEC, or by writing to: Robert C. Haines II Executive Vice President, CFO LCNB Corp. 2 North Broadway P.O.
Copies of these reports are available free of charge in the shareholder information section of the Bank's website, www.lcnb.com, as soon as reasonably practicable after they are electronically filed or furnished to the SEC, or by writing to: Andrew M. Wallace Executive Vice President, CFO LCNB Corp. 2 North Broadway P.O.
The ability to access and use technology is an increasingly competitive factor in the financial services industry. Technology relating to the delivery of financial services, the security and privacy of customer information, and the processing of information is evolving rapidly. LCNB must continually make technology investments to remain competitive in the financial services industry.
The ability to access and use technology, including the use of artificial intelligence, is an increasingly competitive factor in the financial services industry. Technology relating to the delivery of financial services, the security and privacy of customer information, and the processing of information is evolving rapidly. LCNB continually makes technology investments to remain competitive in the financial services industry.
The penalties can be as high as $1.0 million for each day the activity continues. Deposit Insurance Coverage and Assessments The Bank is FDIC insured. Through the DIF, the FDIC provides deposit insurance protection that covers all deposit accounts in FDIC-insured depository institutions up to applicable limits (currently $250,000 per depositor).
The penalties can be as high as $1.0 million for each day the activity continues. Deposit Insurance Coverage and Assessments The Bank is FDIC insured. Through the DIF, the FDIC provides deposit insurance protection that covers all deposit accounts in FDIC-insured depository institutions up to applicable limits (currentl y $250 thousand pe r depositor).
AND SUBSIDIARIES Human Capital As of December 31, 2024, LCNB employed 346 full-time and 47 part-time employees working throughout the ten Ohio counties and one Kentucky county in which LCNB operates. LCNB considers these individuals the most important influence contributing to the Bank’s success and is committed to investing in their ongoing growth and development.
AND SUBSIDIARIES Human Capital As of December 31, 2025, LCNB employed 328 full-time and 35 part-time employees working throughout the ten Ohio counties in which LCNB operates. LCNB considers these individuals the most important influence contributing to the Bank’s success and is committed to investing in their ongoing growth and development.
LCNB may face competitive loss of customers; 5. changes in the interest rate environment, either by interest rate increases or decreases, may have results on LCNB’s operations materially different from those anticipated by LCNB’s market risk management functions; 6. changes in general economic conditions and increased competition could adversely affect LCNB’s operating results; 7. changes in regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact LCNB’s operating results; 8.
LCNB may face competitive loss of customers to both bank and nonbank financial institutions; 5. changes in the interest rate environment, either by interest rate increases or decreases, may have results on LCNB’s operations materially different from those anticipated by LCNB’s market risk management functions; 6. changes in general economic conditions, including the potential economic impacts of a prolonged U.S. government shutdown, and increased competition could adversely affect LCNB’s operating results; 7. changes in or instability regarding regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact LCNB’s operating results; 8.
On June 29, 2011, the Federal Reserve Board set the interchange rate cap at $0.21 per transaction and 5 basis points multiplied by the value of the transaction.
On June 29, 2011, the Federal Reserve Board set the interchange rate cap at $0.21 per transaction plus an ad valorem component of 5 basis points multiplied by the value of the transaction.
The estimated amount of uninsured deposits including related interest accrued and unpaid was $245.8 million and $203.9 million at December 31, 2024 and 2023, respectively.
The estimated amount of uninsured deposits including related interest accrued and unpaid was $304.1 million and $245.8 million at December 31, 2025 and 2024, respectively.
At December 31, 2024, the Bank had: • 36 offices, including a main office in Warren County, Ohio and branch offices in Warren, Butler, Clinton, Clermont, Fayette, Franklin, Hamilton, Montgomery, Preble, and Ross Counties in Ohio and one office in Boone County, Kentucky, • an Operations Center in Warren County, Ohio, • and 39 ATMs.
At December 31, 2025, the Bank had: • 35 offices, including a main office in Warren County, Ohio and branch offices in Warren, Butler, Clinton, Clermont, Fayette, Franklin, Hamilton, Montgomery, Preble, and Ross Counties in Ohio, • an Operations Center in Warren County, Ohio, and • 34 ATMs.
Box 59 Lebanon, Ohio 45036 The SEC also maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding registrants that file reports electronically, as LCNB does.
Box 59 Lebanon, Ohio 45036 The SEC also maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding registrants that file reports electronically, as LCNB does. LCNB's filings are available on the SEC's website under the ticker name "LCNB".
The deregulation of the banking industry and the wide spread enactment of state laws that permit multi-bank holding companies as well as the availability of nationwide interstate banking has created a highly competitive environment for financial services providers.
Competition The Bank faces strong competition both in making loans and attracting deposits. The deregulation of the banking industry and the widespread enactment of state laws that permit multi-bank holding companies as well as the availability of nationwide interstate banking has created a highly competitive environment for financial services providers.
LCNB Corp. receives most of its revenue from dividends paid to it by the Bank. During the years ended December 31, 2024, 2023, and 2022, dividends paid by LCNB National Bank to LCNB Corp. totaled $21,950,000, $29,000,000, and $16,950,000, respectively.
LCNB Corp. receives most of its revenue from dividends paid to it by the Bank. During the years ended December 31, 2025, 2024, and 2023, dividends paid by LCNB National Bank to LCNB Corp. totaled $15.1 million, $22.0 million, and $29.0 million, respectively.
Limitations are placed on the extent to which a bank can disclose an account number or access code for credit card, deposit, or transaction accounts to any nonaffiliated third party for use in marketing. Dodd-Frank Act and Regulatory Relief Act The Dodd-Frank Act, which was enacted in July 2010, effected a fundamental restructuring of federal banking regulation.
Limitations are placed on the extent to which a bank can disclose an account number or access code for credit card, deposit, or transaction accounts to any nonaffiliated third party for use in marketing.
The following table presents an estimate of the contractual maturities of time deposits that exceed the FDIC insurance limit of $250,000 at December 31, 2024: (In thousands) Maturity within 3 months $ 15,871 After 3 but within 6 months 13,209 After 6 but within 12 months 39,241 After 12 months 7,330 $ 75,651 -16- Table of Contents LCNB CORP.
The following table presents an estimate of the contractual maturities of time deposits that exceed the FDIC insurance limit of $25 0 thousand at December 31, 2025: (In thousands) Maturity within 3 months $ 8,005 After 3 but within 6 months 9,491 After 6 but within 12 months 27,197 After 12 months 6,688 $ 51,381 -17- Table of Contents LCNB CORP.
Agency mortgage-backed securities 78,869 69,546 4.59 % — — — % Totals $ 282,620 258,327 2.37 % 16,329 14,933 3.02 % (1) Yields on tax-exempt obligations are computed on a taxable-equivalent basis based upon a 21.0% statutory Federal income tax rate. Excluding holdings in U.S. Treasury securities and U.S.
Agency mortgage-backed securities 68,085 62,517 2.32 % — — — % Totals $ 245,112 232,271 1.92 % 16,080 15,113 5.11 % (1) Yields on tax-exempt obligations are computed on a taxable-equivalent basis based upon a 21.0% statutory Federal income tax rate. Excluding holdings in U.S. Treasury securities and U.S.
Through an ongoing collaboration with a local non-profit organization, The National Conference for Community and Justice (NCCJ) in Dayton, Ohio, and its employee committee is working to expand education and sharing experiences; to acknowledge, celebrate, and encourage diverse backgrounds interests, and lifestyles; to broaden recruitment efforts with a focus on growing diverse talent; and to communicate and share LCNB's overall commitment to diversity, equity and inclusion.
Through an ongoing collaboration with a local non-profit organization, LCNB's employee council is working to expand education and share experiences; to acknowledge, celebrate, and encourage various backgrounds, interests, and lifestyles; and to broaden recruitment efforts in order to source untapped potential.
In 2020, the Bank initiated quarterly Town Hall Meetings and weekly informational emails from senior management that allowed all employees to participate and receive information. These initiatives were very valuable during the COVID-19 pandemic and the Bank continues both to this day.
In 2020, the Bank initiated quarterly Town Hall Meetings and weekly informational emails from senior management that allowed all employees to participate and receive information. The Bank will do the same in 2026 along with some smaller scheduled group meetings to further communicate important initiatives and information.
Treasury notes: Within one year $ 18,259 17,884 0.65 % — — — % One to five years 52,675 48,296 1.19 % — — — % Five to ten years — — — % — — — % After ten years — — — % — — — % Total U.S.
Treasury notes: Within one year $ 7,043 6,884 1.01 % — — — % One to five years 45,583 43,574 1.02 % — — — % Five to ten years — — — % — — — % After ten years — — — % — — — % Total U.S.
The Bank will do the same in 2025 along with some smaller scheduled group meetings at various locations within our market areas to further communicate important initiatives and information. In addition, senior management is available to participate in department and branch staff meetings upon request. -13- Table of Contents LCNB CORP.
In addition, senior management is available to participate in department and branch staff meetings upon request. -14- Table of Contents LCNB CORP.
Agency notes: Within one year 8,001 7,749 0.55 % — — — % One to five years 66,875 61,437 1.12 % — — — % Five to ten years 8,894 8,331 3.55 % — — — % After ten years — — — % — — — % Total U.S.
Agency notes: Within one year 17,439 17,256 1.19 % — — — % One to five years 49,341 46,816 1.09 % — — — % Five to ten years 8,519 8,332 3.59 % — — — % After ten years — — — % — — — % Total U.S.
Removed
The Florence Office, located in Boone County, Kentucky, closed at the end of the business day on February 27, 2025. Competition The Bank faces strong competition both in making loans and attracting deposits.
Added
On July 16, 2025, the OCC, the Board of Governors of the Federal Reserve System, and the FDIC issued a proposal to rescind the CRA final rule issued in October 2023 and to replace it with the prior CRA regulations. The prior CRA regulations currently remain in effect.
Removed
The CFPB has authority to prevent unfair, deceptive, or abusive practices in connection with the offering of consumer financial products.
Added
Cybersecurity In 2015, Federal regulators issued two statements regarding cybersecurity: (i) a statement indicating that financial institutions should design multiple layers of security controls to establish lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing internet-based services of the financial institutions; and (ii) a statement indicating the expectation of a financial institution's management to maintain a sufficient business continuity planning process to ensure rapid recovery, resumption and maintenance of the financial institution's operations after a cyber-attack involving destructive malware.
Removed
LCNB fosters a welcoming environment that celebrates diversity, equity, and inclusion for all.
Added
A financial institution is also expected to develop appropriate processes to: (a) enable recovery of data and business operations, (b) address rebuilding network capabilities, and (c) restore data if the financial institution or any of its critical service providers fall victim to this type of cyber-attack.
Removed
Treasury notes 70,934 66,180 1.05 % — — — % U.S.
Added
If the Company does not comply with this regulatory guidance, it could be subject to various regulatory sanctions, as well as financial penalties.
Removed
Agency notes 83,770 77,517 1.32 % — — — % Corporate bonds: Within one year — — — % — — — % One to five years — — — % — — — % Five to ten years 8,200 7,756 4.61 % — — — % After ten years — — — % — — — % Total corporate bonds 8,200 7,756 4.61 % — — — % Municipal securities, tax-exempt (1): Within one year — — — % 64 63 3.26 % One to five years 3,163 3,043 2.35 % 851 830 3.19 % Five to ten years 1,085 939 2.93 % 9,439 8,838 4.81 % After ten years — — — % 2,846 2,547 4.56 % Total Municipal securities 4,248 3,982 2.50 % 13,200 12,278 4.64 % Municipal securities, taxable: Within one year 3,732 3,684 1.30 % — — — % One to five years 20,318 18,658 2.04 % 140 131 3.85 % Five to ten years 12,549 11,004 2.19 % 199 169 2.30 % After ten years — — — % 2,790 2,355 6.45 % Total Municipal securities 36,599 33,346 2.01 % 3,129 2,655 6.07 % U.S.
Added
In November 2021, federal banking agencies approved a final rule requiring banking agencies to notify regulators of any “significant computer-security incident” as soon as possible and no later than 36 hours after a determination that such an incident occurred, with compliance required by May 2022.
Added
In addition, banks must notify at least one designated point of contact at any affected customer as soon as possible when the bank experiences any computer-security incident that has disrupted or degraded, or is reasonably likely to materially disrupt or degrade, covered services provided to such customer for four or more hours.
Added
The bank and holding company are required to determine whether an incident arises to the level of requiring notification. In April 2005, federal regulators issued guidance requiring financial institutions to develop and implement a response program designed to address incidents of unauthorized access to sensitive customer information maintained by the financial institution or its service provider.
Added
The guidance requires several elements to be included in an institution’s response program including notifications to an institution’s primary federal regulator as soon as possible when the institution becomes aware of an incident involving unauthorized access to or use of sensitive customer information; and notification to its customers when, after a reasonable investigation, the financial institution determines that misuse of the information has occurred or it is reasonably possible that misuse will occur.
Added
State regulators have also been increasingly active in implementing data privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification and data privacy requirements.
Added
Many, but not all, state breach notification laws expressly exempt entities that are subject to federal regulatory breach notification mandates The Company continues to monitor developments in the states in which its customers are located.
Added
The Cybersecurity Information Sharing Act (“CISA”) is intended to improve cybersecurity in the U.S. by enhanced sharing of information about security threats among the U.S. government and private sector entities, including financial institutions, and empowers the Cybersecurity and Infrastructure Security Agency (“CISA Agency”) to oversee this information-sharing process.
Added
The CISA also authorizes companies to monitor their own systems notwithstanding any other provision of law and allows companies to carry out defensive measures on their own systems from cyber-attacks or other information or security breaches.
Added
The law includes liability protections for companies that share cyber-threat information with third parties so long as such sharing activity is conducted in accordance with the CISA.
Added
Although the CISA originally expired on September 30, 2025 and was temporarily reauthorized to remain in effect through September 30, 2026, the long-term status of the CISA remains uncertain pending further action by the U.S. Congress.
Added
In addition, the enactment of the Cyber Incident Reporting for Critical Infrastructure Act (“CIRCIA”) in 2022, once rulemaking is complete, will require, among other things, certain companies to report significant cyber incidents to the CISA Agency within 72 hours from the time the company reasonably believes the incident occurred (and within 24 hours of making a ransom payment as a result of a ransomware attack).
Added
On April 4, 2024, the CISA Agency proposed a rule under the CIRCIA that would clarify the scope of cyber incidents to be reported and would further define covered entities subject to the CIRCIA to expressly include companies in the financial services industry that are required to report cyber incidents to their primary federal regulators.
Added
Final rulemaking for CIRCIA has been extended to May 2026. On July 26, 2023, the SEC adopted final rules that require public companies to promptly disclose material cybersecurity incidents in a Current Report on Form 8-K and detailed information regarding their cybersecurity risk management, strategy, and governance on an annual basis in its Annual Reports on Form 10-K.
Added
Companies are required to report on Form 8-K any cybersecurity incident they determine to be material within four business days of making that determination. These SEC rules, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.
Added
See Item 1C for further discussion related to the Company's risk management, strategy, and governance of cybersecurity. -11- Table of Contents LCNB CORP. AND SUBSIDIARIES Dodd-Frank Act and Regulatory Relief Act The Dodd-Frank Act, which was enacted in July 2010, effected a fundamental restructuring of federal banking regulation.
Added
Treasury notes 52,626 50,458 1.19 % — — — % U.S.
Added
Agency notes 75,299 72,404 1.40 % — — — % Corporate bonds: Within one year — — — % — — — % One to five years — — — % — — — % Five to ten years 11,013 10,733 5.62 % — — — % After ten years 1,000 1,000 7 % — — — % Total corporate bonds 12,013 11,733 5.74 % — — — % Municipal securities, tax-exempt (1): Within one year 1,030 1,030 4.95 % 279 274 2.24 % One to five years 2,431 2,343 2.19 % 772 730 3.50 % Five to ten years 730 632 3.69 % 7,960 7,643 4.92 % After ten years — — — % 4,102 3,818 5.25 % Total Municipal securities 4,191 4,005 3.13 % 13,113 12,465 4.88 % Municipal securities, taxable: Within one year 1,195 1,173 1.29 % — — 0.00 % One to five years 28,996 27,477 2.10 % 112 108 3.85 % Five to ten years 2,707 2,504 2.49 % 172 154 2.30 % After ten years — — — % 2,683 2,386 6.45 % Total Municipal securities 32,898 31,154 2.10 % 2,967 2,648 6.11 % U.S.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

25 edited+10 added−7 removed78 unchanged
Biggest changeConsumers may decide not to use banks to complete their financial transactions. Technology and other changes, including the emergence of Fintech Companies, are allowing parties to complete financial transactions through alternative methods that historically have involved banks. For example, consumers can complete transactions, such as paying bills and/or transferring funds, directly without the assistance of banks.
Biggest changeEmergence of non-bank alternatives to the financial system may result in customer disintermediation. Consumers may decide not to use banks to complete their financial transactions. Technology and other changes, including the emergence of Fintech Companies, are allowing parties to complete financial transactions through alternative methods that historically have involved banks.
Additionally, increases in unemployment also may affect the ability of certain clients to repay loans and the financial results of commercial clients in localities with higher unemployment may result in loan defaults and foreclosures and may impair the value of loan collateral. Loan defaults and foreclosures are unavoidable in the banking industry.
Additionally, increases in unemployment may also affect the ability of certain clients to repay loans and the financial results of commercial clients in localities with higher unemployment may result in loan defaults and foreclosures and may impair the value of loan collateral. Loan defaults and foreclosures are unavoidable in the banking industry.
Accordingly, unrealized gains and losses, net of tax, in the estimated fair value of the available-for-sale portfolio is recorded as other comprehensive income, a separate component of shareholders’ equity. The fair value of LCNB’s investment portfolio may decline, causing a corresponding decline in shareholders’ equity.
Accordingly, unrealized gains and losses, net of tax, in the estimated fair value of the available-for-sale portfolio is recorded as other comprehensive income (loss), a separate component of shareholders’ equity. The fair value of LCNB’s investment portfolio may decline, causing a corresponding decline in shareholders’ equity.
If, as a result of general economic conditions or a decrease in asset quality, management determines that additional increases in the allowance for credit losses are necessary, LCNB will incur additional expenses. -21- Table of Contents LCNB CORP. AND SUBSIDIARIES The fair value of LCNB ’ s investments could decline. Most of LCNB’s investment securities portfolio is designated as available-for-sale.
If, as a result of general economic conditions or a decrease in asset quality, management determines that additional increases in the allowance for credit losses are necessary, LCNB will incur additional expenses. -22- Table of Contents LCNB CORP. AND SUBSIDIARIES The fair value of LCNB ’ s investments could decline. Most of LCNB’s investment securities portfolio is designated as available-for-sale.
LCNB cannot fully eliminate credit risk and, as a result, credit losses may increase in the future. -17- Table of Contents LCNB CORP. AND SUBSIDIARIES Risks Related to LCNB's Operations LCNB ’ s loan portfolio includes a substantial amount of commercial and industrial loans and commercial real estate loans, which may have more risks than residential or consumer loans.
LCNB cannot fully eliminate credit risk and, as a result, credit losses may increase in the future. -18- Table of Contents LCNB CORP. AND SUBSIDIARIES Risks Related to LCNB's Operations LCNB ’ s loan portfolio includes a substantial amount of commercial and industrial loans and commercial real estate loans, which may have more risks than residential or consumer loans.
Any failure or circumvention of LCNB’s controls and procedures or failure to comply with regulations related to its controls and procedures could have a material adverse effect on LCNB’s business, results of operations, and financial condition. -18- Table of Contents LCNB CORP. AND SUBSIDIARIES LCNB ’ s information systems may experience an interruption, cyberattack, or other breach in security.
Any failure or circumvention of LCNB’s controls and procedures or failure to comply with regulations related to its controls and procedures could have a material adverse effect on LCNB’s business, results of operations, and financial condition. -19- Table of Contents LCNB CORP. AND SUBSIDIARIES LCNB ’ s information systems may experience an interruption, cyberattack, or other breach in security.
Recessions, periods of unemployment, changes in interest rates, inflationary pressures, money supply, tariffs and trade policy, and other factors beyond LCNB’s control may adversely affect its asset quality, deposit levels, loan demand, and earnings. Inflationary pressures directly affect the level of interest rates earned from loans and investments and paid for deposits and borrowings.
Recessions, periods of unemployment, changes in interest rates, inflationary pressures, money supply, tariffs and trade policy including retaliatory tariffs, and other factors beyond LCNB’s control may adversely affect its asset quality, deposit levels, loan demand, and earnings. Inflationary pressures directly affect the level of interest rates earned from loans and investments and paid for deposits and borrowings.
Such mistakes may give rise to surcharge actions by beneficiaries, with damages substantially in excess of the fees earned from management of the accounts. -19- Table of Contents LCNB CORP. AND SUBSIDIARIES General Risk Factors Failure to meet regulatory capital requirements could adversely affect LCNB ’ s business.
Such mistakes may give rise to surcharge actions by beneficiaries, with damages substantially in excess of the fees earned from management of the accounts. -20- Table of Contents LCNB CORP. AND SUBSIDIARIES General Risk Factors Failure to meet regulatory capital requirements could adversely affect LCNB ’ s business.
For example, LCNB may occasionally change the proportion of loan originations that are sold in the secondary market and instead add a greater proportion to its loan portfolio. -20- Table of Contents LCNB CORP. AND SUBSIDIARIES Banking competition is intense. The banking industry and related financial service providers operate in a highly competitive market.
For example, LCNB may occasionally change the proportion of loan originations that are sold in the secondary market and instead add a greater proportion to its loan portfolio. -21- Table of Contents LCNB CORP. AND SUBSIDIARIES Banking competition is intense. The banking industry and related financial service providers operate in a highly competitive market.
Because LCNB operates primarily in Southwestern and South Central Ohio and Northern Kentucky, its hiring pool is also limited by those markets. Competition for key employees may require LCNB to offer higher compensation to attract or retain key employees, which may adversely affect salaries and employee benefit costs.
Because LCNB operates primarily in Southwestern and South Central Ohio, its hiring pool is also limited by those markets. Competition for key employees may require LCNB to offer higher compensation to attract or retain key employees, which may adversely affect salaries and employee benefit costs.
LCNB competes with financial service providers such as other commercial banks, savings and loan associations, credit unions, mortgage banking firms, Financial Technology or “FinTech” companies, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds, and other financial intermediaries.
LCNB competes with financial service providers such as other commercial banks, savings and loan associations, credit unions, mortgage banking firms, Financial Technology or “FinTech” companies including decentralized finance and cryptocurrency, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds, and other financial intermediaries.
Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, tariffs and trade policy, and other factors beyond LCNB’s control may affect its deposit levels and composition, demand for loans, the ability of borrowers to repay their loans, and the value of the collateral securing the loans it makes.
Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, prolonged government shutdown, tariffs and trade policy including impositions of retaliatory tariffs, and other factors beyond LCNB’s control may affect its deposit levels and composition, demand for loans, the ability of borrowers to repay their loans, and the value of the collateral securing the loans it makes.
Such future legislation and/or changes in regulations could increase or decrease the cost of doing business, limit or expand permissible activities, or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. The likelihood of any major changes in the future and their effects are impossible to predict. -22- Table of Contents LCNB CORP.
Such future legislation and/or changes in regulations could increase or decrease the cost of doing business, limit or expand permissible activities, or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. The likelihood of any major changes in the future and their effects are indeterminable. -23- Table of Contents LCNB CORP.
Failure to adopt new technologies may result in customer dissatisfaction. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.
Failure to adopt new technologies may result in customer dissatisfaction. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including the emergence of artificial intelligence.
In order to mitigate these heightened risks, LCNB continually evaluates and monitors these types of loans. Approximately 89.4% of our total commercial loans or about 64.6% of our total loans relate to commercial real estate.
In order to mitigate these heightened risks, LCNB continually evaluates and monitors these types of loans. Approximately 90.2% of our total commercial loans or about 64.4% of our total loans relate to commercial real estate.
These and other factors may impact specific categories of the portfolio differently and the effect any of these factors may have on any specific category of the portfolio cannot be predicted. Many state and local governmental authorities have experienced deterioration of financial condition in recent years due to declining tax revenues, increased demand for services, and various other factors.
These and other factors may impact specific categories of the portfolio differently and the effect any of these factors may have on any specific category of the portfolio cannot be predicted. State and local governmental authorities may experience deterioration of financial condition due to declining tax revenues, increased demand for services, and various other factors.
Such events could affect the stability of LCNB’s deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in lost revenue, or cause LCNB to incur additional expenses.
Such events could affect the stability of LCNB’s deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in lost revenue, or cause LCNB to incur additional expenses. -24- Table of Contents LCNB CORP. AND SUBSIDIARIES
LCNB may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its customers. Failure to successfully keep pace with technological change affecting the financial services industry could negatively affect LCNB’s growth, revenue and profit. Emergence of non-bank alternatives to the financial system may result in customer disintermediation.
LCNB may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its customers, or customers may be averse to the adoption of new technologies. Failure to successfully keep pace with technological change affecting the financial services industry could negatively affect LCNB’s growth, revenue and profit.
A primary source of income from operations is net interest income, which is equal to the difference between interest income earned on loans and investment securities and the interest paid for deposits and other borrowings.
Fluctuations in interest rates may negatively impact LCNB’s profitability. A primary source of income from operations is net interest income, which is equal to the difference between interest income earned on loans and investment securities and the interest paid for deposits and other borrowings.
Any failure, interruption, cyberattack, email phishing scam, or other breach in security of these systems could result in failures or disruptions in LCNB’s customer relationship management, general ledger, deposit, loan, and other systems.
Any failure, interruption, cyberattack, email phishing scam, or other breach in security of these systems could result in failures or disruptions in LCNB’s customer relationship management, general ledger, deposit, loan, and other systems. Emerging technologies, such as artificial intelligence, may further increase the risk of a cyber-attack.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on LCNB’s financial condition and results of operations. The banking industry is highly regulated. LCNB is subject to regulation, supervision, and examination by the Federal Reserve Board and the Bank is subject to regulation, supervision, and examination by the OCC.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on LCNB’s financial condition and results of operations. The banking industry is highly regulated and is thus subject to larger impacts due to regulatory uncertainty.
Due to LCNB’s volume of real estate loans, declining real estate values could affect the value of property used as collateral as well as LCNB’s ability to sell the collateral upon foreclosure.
Due to LCNB’s volume of real estate loans, declining real estate values could affect the value of property used as collateral as well as LCNB’s ability to sell the collateral upon foreclosure. In 2025, the federal government was shut down from October 1, 2025 to November 12, 2025.
LCNB and the Bank are also subject to regulation and examination by the FDIC as the deposit insurer. The CFPB is responsible for most consumer protection laws and has broad authority, with certain exceptions, to regulate financial products offered by banks.
The CFPB is responsible for most consumer protection laws and has historically had broad authority, with certain exceptions, to regulate financial products offered by banks.
The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits.
For example, consumers can complete transactions, such as paying bills and/or transferring funds, directly without the assistance of banks. The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits.
It may also consider and enter into new lines of business or offer new products or services.
From time to time, LCNB may seek to acquire other financial institutions or parts of those institutions or may open new branch offices. It may also consider and enter into new lines of business or offer new products or services.
Removed
If foreclosed on, commercial real estate is often unique and may be difficult to liquidate. Future growth and expansion opportunities may contain risks that could negatively affect us. From time to time, LCNB may seek to acquire other financial institutions or parts of those institutions or may open new branch offices.
Added
The economic impact of a future long-spanning government shutdown is inherently uncertain and could have a material effect on LCNB’s business, financial condition, and operations.
Removed
The FOMC decreased the Federal Funds target range by 100 basis points during 2024 after increasing the range by 100 basis points during 2023. Fluctuations in interest rates may negatively impact LCNB’s profitability.
Added
If foreclosed on, commercial real estate is often unique and may be difficult to liquidate. LCNB ’ s value of intangible assets may decline, due to continued competition for deposits and other factors. As of December 31, 2025, LCNB had total core deposit and other intangibles, net totaling $9.271 million.
Removed
Outbreaks of communicable diseases have led to periods of significant volatility in financial and other markets, adversely affected our ability to conduct normal business, adversely affected our clients, and may harm our businesses, financial condition and results of operations.
Added
Core deposit and other intangibles net decreased due to amortization of core deposit and mortgage servicing rights intangibles.
Removed
Pandemics and widespread outbreaks of communicable diseases may cause significant disruption in the international and United States economies and financial markets, including in the regions in which the Company operates.
Added
A significant decline in LCNB’s expected future cash flows, a significant adverse change in the business climate, slower growth rates or a significant and sustained decline in the price of LCNB common stock may necessitate taking charges in the future related to the impairment of LCNB’s deposit intangible assets.
Removed
The spread of these diseases may lead to the cancellation of events and travel, business shutdowns, reduction in business activity and financial transactions, supply chain interruptions, and overall economic and financial market instability.
Added
Additionally, increased competition for deposits, whether from competitive financial institutions or from nonbank financial institutions or competitive technologies, like cryptocurrency, could lead to further decreases in core deposits. Competition for deposits will likely continue to increase as technology evolves.
Removed
Government imposed restrictions and other consequences of public health issues may result in significant adverse effects for many different types of businesses, and result in a significant number of layoffs and furloughs of employees nationwide and in the regions in which we operate, which, in turn, can impact our customer base.
Added
If LCNB were to conclude that a future write-down of core deposit intangible assets is necessary, LCNB would record the appropriate charge, which could have a negative effect on LCNB’s business, financial condition and results of operations. Future growth and expansion opportunities may contain risks that could negatively affect us.
Removed
To the extent widespread health related events occur in the future, we could experience material and adverse effects on our business, operations, operating results, financial condition, liquidity, and capital levels as a result. -23- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 1B. Unresolved Staff Comments None.
Added
For example, the existing Chair of the Federal Reserve’s term ends on May 15, 2026 and recent political commentary has introduced additional uncertainty about how interest rate policy may evolve under the new leadership of the Board of Governors later in 2026.
Added
LCNB is subject to regulation, supervision, and examination by the Federal Reserve Board and the Bank is subject to regulation, supervision, and examination by the OCC. LCNB and the Bank are also subject to regulation and examination by the FDIC as the deposit insurer.
Added
Furthermore, depending on presidential administrative priorities, there may be widespread initiatives to either regulate or deregulate financial institutions, which can lead to uncertainty for financial institutions as they navigate changes on a relatively frequent basis.
Added
LCNB has implemented technologies that utilize artificial intelligence in connection with LCNB’s business and operations in order to scale its business, but the outcome of implementation may not realize all the benefits LCNB is hoping to scale.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

0 edited+2 added−13 removed0 unchanged
Removed
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy LCNB recognizes the critical importance of cybersecurity in safeguarding its business operations, intellectual property, and sensitive information. Cybersecurity risk management and strategy are integral to LCNB’s overall risk management framework. The following outlines LCNB’s approach to identifying, assessing, and mitigating cybersecurity risks.
Added
Item 1C. Cybersecurity 25 Item 2. Properties 26 Item 3. Legal Proceedings 26 Item 4. Mine Safety Disclosures 26 PART II 27 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. 27 Item 6. [Reserved] 29 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A.
Removed
LCNB conducts regular risk assessments to identify, prevent, and mitigate potential cybersecurity threats and vulnerabilities. These assessments consider the evolving threat landscape, the sensitivity of our data, and the potential impact on business operations. These risk assessments are utilized to develop our Information Security Program. LCNB leverages threat intelligence sources to continually evaluate current and emerging cyber threats.
Added
Quantitative and Qualitative Disclosures About Market Risk 41 Item 8. Financial Statements and Supplementary Data 42 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 42 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 44
Removed
This proactive approach allows LCNB to anticipate and respond to potential risks promptly. LCNB’s cybersecurity controls are designed to protect against unauthorized access, data breaches, and other cyber threats. These controls encompass a multi-layered defense strategy, including firewalls, intrusion detection systems, encryption, and continuous monitoring. LCNB recognizes that employees are a critical line of defense.
Removed
Regular training programs ensure that our staff is aware of cybersecurity best practices, social engineering tactics, and the importance of safeguarding sensitive information. In the event of a cybersecurity incident, a well-defined incident response plan is in place. This plan includes a structured approach to containing, eradicating, and recovering from the incident, as well as communication protocols with stakeholders.
Removed
To further mitigate the potential financial impacts of cybersecurity incidents, LCNB maintains cybersecurity insurance coverage. This coverage is regularly reviewed and adjusted to align with the evolving threat landscape and risk profile. LCNB is committed to a culture of continuous improvement in its cybersecurity practices.
Removed
Regular evaluations, feedback mechanisms, and participation in industry collaborations help us adapt and enhance the strategy in response to emerging threats. LCNB’s cybersecurity risk management and strategy reflect the dedication to maintaining the confidentiality, integrity, and availability of our information assets. LCNB believes that this proactive approach positions the Company well to navigate the evolving cybersecurity landscape.
Removed
As of the report date, risks from cybersecurity threats have not materially affected our company. -24- Table of Contents LCNB CORP. AND SUBSIDIARIES Governance LCNB’s cybersecurity strategy is underpinned by a robust governance framework overseen by the Board of Directors.
Removed
The Board plays an active role in shaping cybersecurity policies, conducting regular reviews of the effectiveness of the cybersecurity program, and ensuring its alignment with overarching business objectives. This governance ensures a comprehensive and proactive approach to managing cybersecurity risks.
Removed
The Privacy Committee, in conjunction with the Information Security Officer, plays a pivotal role in the assessment and management of cybersecurity risks. Regular committee meetings are conducted to discuss and analyze the evolving threat landscape. These meeting minutes are systematically reported up to the Executive and Board levels, ensuring that key decision-makers are well-informed and can provide strategic guidance.
Removed
LCNB’s first line of defense against cybersecurity threats involves leveraging its workforce and engaging various Third Parties. Employees play a crucial role in maintaining a vigilant stance, while external partners contribute specialized expertise to enhance the overall cybersecurity posture. This collaborative approach strengthens LCNB’s defense mechanisms against evolving cyber threats.
Removed
Internal and external audits serve as essential tools to evaluate the efficacy of LCNB’s cybersecurity processes. These audits are conducted periodically to identify vulnerabilities, assess compliance with established policies, and ensure the effectiveness of implemented security controls. The insights gained from audits contribute to the continuous improvement and refinement of cybersecurity measures.
Removed
The Bank is equipped with a cadre of IT professionals boasting extensive industry experience in cybersecurity. These dedicated individuals bring years of knowledge to the table, staying abreast of the latest developments in the field. Their expertise enhances LCNB’s ability to address emerging threats proactively and reinforces the resilience of our cybersecurity framework.
Removed
LCNB’s governance structure ensures that cybersecurity is a top-level priority, with the Board, committees, employees, and external partners collaborating seamlessly to safeguard systems and data. Through continuous evaluation, robust defense mechanisms, and a skilled workforce, LCNB remains committed to maintaining the highest standards of cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeManagement believes that LCNB's banking and other offices are in good condition and suitable to its needs. The Florence, Kentucky office closed at the end of the business day on February 27, 2025.
Biggest changeManagement believes that LCNB's banking and other offices are in good condition and suitable to its needs.
The Main Office, Oxford, Ohio, Eaton, Ohio, and Bridgetown, Ohio locations have excess space that is currently being leased to third parties. An operations center in Lebanon, Ohio is currently being leased from the Warren County Port Authority. Upon expiration of the lease in 2027, LCNB has the option to purchase the property for $1.00.
The Main Office, Oxford, Eaton, Bridgetown, and Hyde Park locations have excess space that is currently being leased to third parties. An operations center in Lebanon, Ohio is currently being leased from the Warren County Port Authority. Upon expiration of the lease in 2027, LCNB has the option to purchase the property for $1.00.
Item 2. Properties LCNB owns its main office in Lebanon, Ohio, which is approximately 28,000 square feet and houses its executive, wealth management, and certain administrative personnel. As of December 31, 2024, LCNB owns an additional 28 branch locations and leases an additional seven branch locations, pursuant to operating leases.
Item 2. Properties LCNB owns its main office in Lebanon, Ohio, which is approximately 28 thousand square feet and houses its executive, wealth management, and certain administrative personnel. As of December 31, 2025, LCNB owns an additional 27 branch locations and leases an additional seven branch locations, pursuant to operating leases.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+5 added−1 removed4 unchanged
Biggest changeThe 2015 Plan provides for the issuance of up to 450,000 shares of common stock. The 2015 Plan will terminate on April 28, 2025 and is subject to earlier termination by the Compensation Committee. On February 27, 2023, LCNB's Board of Directors authorized a new Issuer Stock Repurchase Plan Agreement (the “Plan”).
Biggest changeAwards may be made in the form of stock options, appreciation rights, restricted shares, and/or restricted share units. The 2025 Plan provides for the issuance of up to 600 thousand shares of common stock. It will terminate on May 19, 2035 and is subject to earlier termination by the Compensation Committee.
As part of the Plan, LCNB entered into a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 10b5-1 trading plan permits common shares to be repurchased at times that LCNB might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions.
As part of the Program, LCNB entered into a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 10b5-1 trading plan permits common shares to be repurchased at times that LCNB might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions.
Factors include, but are not limited to, share price, trading volume, and general market conditions, along with LCNB’s general business conditions. The Plan may be suspended or discontinued at any time and does not obligate LCNB to acquire any specific number of its common shares.
Factors include, but are not limited to, share price, trading volume, and general market conditions, along with LCNB’s general business conditions. The Program may be suspended or discontinued at any time and does not obligate LCNB to acquire any specific number of its common shares.
Under the Plan, LCNB may purchase common shares through various means such as open market transactions, including block purchases and privately negotiated transactions. The number of shares repurchased and the timing, manner, price, and amount of any repurchases will be determined at LCNB's discretion.
Under the Program, LCNB may purchase common shares through various means such as open market transactions, including block purchases and privately negotiated transactions. The number of shares repurchased and the timing, manner, price, and amount of any repurchases will be determined at LCNB's discretion.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities LCNB had approximately 1,138 registered holders of its common stock as of March 12, 2025. The number of shareholders includes banks and brokers who act as nominees, each of whom may represent more than one shareholder.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities LCNB had approximately 1,123 registered holders of its common stock as of March 11, 2026. The number of shareholders includes banks and brokers who act as nominees, each of whom may represent more than one shareholder.
The 10b5-1 trading plan is administered by an independent broker and is subject to price, market volume, and timing restrictions. No purchases were made under the Program during the three months ended December 31, 2024. The maximum number of shares that may yet be purchased under the Program is 315,047. -26- Table of Contents LCNB CORP. AND SUBSIDIARIES
The 10b5-1 trading plan is administered by an independent broker and is subject to price, market volume, and timing restrictions. No purchases were made under the Program during the three months ended December 31, 2025. The maximum number of shares that may yet be purchased under the Program is approximately 311 thousand. -27- Table of Contents LCNB CORP.
Under the terms of the Plan, LCNB is authorized to repurchase up to 500,000 of its outstanding common shares. The Plan replaced and superseded LCNB’s prior Issuer Stock Repurchase Plan Agreement, which was adopted in May 27, 2022.
On February 27, 2023, LCNB's Board of Directors authorized a new Issuer Stock Repurchase Plan Agreement (the “Program”). Under the terms of the Program, LCNB is authorized to repurchase up to 500 thousand of its outstanding common shares. The Program replaced and superseded LCNB’s prior Issuer Stock Repurchase Plan Agreement, which was adopted on May 27, 2022.
The 2015 Ownership Incentive Plan (the "2015 Plan") was approved by LCNB's shareholders at the annual meeting on April 28, 2015 and allows for stock-based awards to eligible employees, as determined by the Compensation Committee of LCNB's Board of Directors ("Compensation Committee"). Awards may be made in the form of stock options, appreciation rights, restricted shares, and/or restricted share units.
The 2025 Ownership Incentive Plan (the "2025 Plan") was approved by LCNB's shareholders at the annual meeting on May 19, 2025 and supersedes the 2015 Ownership Plan, which terminated on April 28, 2025. Both plans allow for stock-based awards to eligible employees, as determined by the Compensation Committee of LCNB's Board of Directors ("Compensation Committee").
Removed
During the period of this report, LCNB did not sell any of its securities that were not registered under the Securities Act.
Added
AND SUBSIDIARIES Stock Performance Graph The graph below provides an indicator of cumulative total shareholder returns for LCNB as compared with the NASDAQ Composite Index and the S&P U.S. BMI Banks - Midwest Region Index. This graph covers the period from December 31, 2020 through December 31, 2025.
Added
The cumulative total shareholder returns included in the graph reflect the returns for the shares of common stock of LCNB. The information provided in the graph assumes that $100 was invested on December 31, 2020 in LCNB common stock, the NASDAQ Composite Index, and the S&P U.S. BMI Banks - Midwest Region Index and that all dividends were reinvested.
Added
This graph shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, unless the Company specifically incorporates this report by reference. It will not be otherwise filed under such Acts.
Added
Period Ending Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 LCNB Corp. $ 100.00 138.78 134.10 124.07 126.15 144.71 NASDAQ Composite Index $ 100.00 122.18 82.43 119.22 154.48 187.14 S&P U.S. BMI Banks - Midwest Region Index $ 100.00 132.12 114.02 116.4 142.02 159.02 Source: S&P Global Market Intelligence © 2026 Unregistered Sales of Equity Securities and Repurchases.
Added
There were no unregistered sales of securities during the fiscal year. As previously disclosed, there were no repurchases of shares or other units of LCNB’s securities registered in the fourth quarter of the fiscal year. -28- Table of Contents LCNB CORP. AND SUBSIDIARIES

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

7 edited+0 added−1 removed1 unchanged
Biggest changeIncluded in the provision for credit losses for 2024 was a $763,000 provision expense related to loans acquired through the Eagle Financial Bancorp acquisition that were not considered purchased with credit deterioration (non-PCD loans").
Biggest changeIncluded in the provision for credit losses for 2025 was a $1.4 million provision to fully reserve against two commercial and industrial loans made to the same borrower. Included in the provision for 2024 was a $763 thousand provision related to loans acquired through the Eagle Financial Bancorp acquisition that were not considered purchased with credit deterioration ("non-PCD loans").
The following table presents, for the years indicated, 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. -27- Table of Contents LCNB CORP. AND SUBSIDIARIES
The following table presents, for the years indicated, 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. -29- Table of Contents LCNB CORP. AND SUBSIDIARIES
The following items affected financial position and results of operations for the years indicated: • Cincinnati Bancorp, Inc. merged with and into LCNB Corp. on November 1, 2023 and Eagle Financial Bancorp, Inc. merged with and into LCNB Corp. on April 12, 2024. • Merger related expenses connected with the above two acquisitions totaled $3,442,000 and $4,656,000 during 2024 and 2023, respectively. • Net interest income in 2024 was $60,795,000, compared to $56,349,000 in 2023 and $61,042,000 in 2022. • The provision for credit losses in 2024 totaled $1,962,000, compared to a provision of $2,077,000 for 2023 and $250,000 for 2022.
The following items affected financial position and results of operations for the years indicated: • Cincinnati Bancorp, Inc. merged with and into LCNB Corp. on November 1, 2023 and Eagle Financial Bancorp, Inc. merged with and into LCNB Corp. on April 12, 2024. • Merger related expenses connected with the above two acquisitions totaled $3.4 million and $4.7 million during 2024 and 2023, respectively. • Net interest income in 2025 was $70.2 million, compared to $60.8 million in 2024 and $56.3 million 2023. • The provision for credit losses in 2025 totaled $1.9 million, compared to a provision of $2.0 million for 2024 and $2.1 for 2023.
Gains were higher in 2024 primarily due to the volume of loans sold. • Other non-interest expense for 2024 and 2023 were partially offset by gains recognized on the sale of closed office buildings of $455,000 and $425,000, respectively.
Gains were higher in 2024 primarily due to the volume of loans sold. • Other non-interest expense for 2025 included $265 thousand in impairment charges on a closed office building held-for-sale. Other non-interest expense for 2024 and 2023 were partially offset by gains recognized on the sales of closed office buildings of $455 thousand and $425 thousand, respectively.
Net Interest Income LCNB's primary source of earnings is net interest income, which is the difference between earnings from loans and other investments and interest paid on deposits and other liabilities.
The offices were closed as a result of LCNB's branch consolidation strategy. Net Interest Income LCNB's primary source of earnings is net interest income, which is the difference between earnings from loans and other investments and interest paid on deposits and other liabilities.
A comparable provision of $1,722,000 was recognized on non-PCD loans acquired through the Cincinnati Bancorp acquisition in 2023. • Net gains from sales of loans totaled $3,433,000 in 2024, $697,000 in 2023, and $196,000 in 2022.
A comparable provision of $1.7 million was recognized on non-PCD loans acquired through the Cincinnati Bancorp acquisition in 2023. • Net gains from sales of loans totaled $2.9 million in 2025, $3.4 million in 2024, and $697 thousand in 2023.
Overview Net income for 2024 was $13,492,000 (basic and diluted earnings per share of $0.97), compared to $12,628,000 (basic and diluted earnings per share of $1.10) in 2023 and $22,128,000 (basic and diluted earnings per share of $1.93) in 2022.
Overview Net income for 2025 was $23.1 million (basic and diluted earnings per share of $1.63), compared to $13.5 million (basic and diluted earnings per share of $0.97) in 2024 and $12.6 million (basic and diluted earnings per share of $1.10) in 2023.
Removed
The offices were closed as a result of LCNB's branch consolidation strategy. • Other non-interest expense for 2022 included $471,000 in losses from the sales of two office buildings as a result of LCNB's branch consolidation strategy. • Other non-interest expense for 2022 was partially offset by an $889,000 gain recognized from the sale of other real estate owned.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

56 edited+13 added−23 removed41 unchanged
Biggest changeFinancial Condition A comparison of balance sheet line items at December 31 is as follows (in thousands): 2024 2023 Difference $ Difference % ASSETS: Total cash and cash equivalents 35,744 39,723 (3,979 ) (10.02 )% Interest-bearing time deposits 250 — 250 NM Investment securities: Equity securities with a readily determinable fair value, at fair value 1,363 1,336 27 2.02 % Equity securities without a readily determinable fair value, at cost 3,666 3,666 — 0.00 % Debt securities, available-for-sale, at fair value 258,327 276,601 (18,274 ) (6.61 )% Debt securities, held-to-maturity, at cost 16,324 16,858 (534 ) (3.17 )% Federal Reserve Bank stock, at cost 6,405 5,086 1,319 25.93 % Federal Home Loan Bank stock, at cost 20,710 15,176 5,534 36.47 % Loans, net 1,709,811 1,712,946 (3,135 ) (0.18 )% Loans held for sale 5,556 — 5,556 NM Premises and equipment, net 41,049 36,302 4,747 13.08 % Operating lease right-of-use assets 5,785 6,000 (215 ) (3.58 )% Goodwill 90,310 79,509 10,801 13.58 % Core deposit and other intangibles, net 11,104 9,494 1,610 16.96 % Bank owned life insurance 54,002 49,847 4,155 8.34 % Interest receivable 8,701 8,405 296 3.52 % Other assets, net 38,287 30,643 7,644 24.95 % Total assets $ 2,307,394 2,291,592 15,802 0.69 % LIABILITIES: Deposits: Non-interest-bearing 459,619 462,267 (2,648 ) (0.57 )% Interest-bearing 1,418,673 1,362,122 56,551 4.15 % Total deposits 1,878,292 1,824,389 53,903 2.95 % Short-term borrowings — 97,395 (97,395 ) (100.00 )% Long-term debt 155,153 113,123 42,030 37.15 % Operating leases liability 6,115 6,261 (146 ) (2.33 )% Accrued interest and other liabilities 14,798 15,121 (323 ) (2.14 )% Total liabilities 2,054,358 2,056,289 (1,931 ) (0.09 )% SHAREHOLDERS' EQUITY: Common shares 186,937 173,637 13,300 7.66 % Retained earnings 141,290 140,017 1,273 0.91 % Treasury shares, at cost (56,002 ) (56,015 ) 13 (0.02 )% Accumulated other comprehensive loss, net of taxes (19,189 ) (22,336 ) 3,147 (14.09 )% Total shareholders' equity 253,036 235,303 17,733 7.54 % Total liabilities and shareholders' equity $ 2,307,394 2,291,592 15,802 0.69 % NM - Not Meaningful -33- Table of Contents LCNB CORP.
Biggest changeFinancial Condition A comparison of balance sheet line items at December 31 is as follows (in thousands): 2025 2024 Difference $ Difference % ASSETS: Total cash and cash equivalents $ 21,614 35,744 (14,130 ) (39.53 )% Interest-bearing time deposits 2,710 250 2,460 984.00 % Investment securities: Equity securities with a readily determinable fair value, at fair value 1,433 1,363 70 5.14 % Equity securities without a readily determinable fair value, at cost 3,666 3,666 — 0.00 % Debt securities, available-for-sale, at fair value 232,271 258,327 (26,056 ) (10.09 )% Debt securities, held-to-maturity, at cost 16,080 16,324 (244 ) (1.49 )% Federal Reserve Bank stock, at cost 6,405 6,405 — 0.00 % Federal Home Loan Bank stock, at cost 20,710 20,710 — 0.00 % Loans, net 1,691,827 1,709,811 (17,984 ) (1.05 )% Loans held for sale 1,718 5,556 (3,838 ) (69.08 )% Premises and equipment, net 39,196 41,049 (1,853 ) (4.51 )% Operating lease right-of-use assets 6,475 5,785 690 11.93 % Goodwill 90,310 90,310 — 0.00 % Core deposit and other intangibles, net 9,271 11,104 (1,833 ) (16.51 )% Bank owned life insurance 55,424 54,002 1,422 2.63 % Interest receivable 7,968 8,701 (733 ) (8.42 )% Other assets, net 33,691 38,287 (4,596 ) (12.00 )% Total assets $ 2,240,769 2,307,394 (66,625 ) (2.89 )% LIABILITIES: Deposits: Non-interest-bearing $ 466,094 459,619 6,475 1.41 % Interest-bearing 1,374,261 1,418,673 (44,412 ) (3.13 )% Total deposits 1,840,355 1,878,292 (37,937 ) (2.02 )% Short-term borrowings — — — NM Long-term debt 104,428 155,153 (50,725 ) (32.69 )% Operating leases liability 6,877 6,115 762 12.46 % Accrued interest and other liabilities 15,180 14,798 382 2.58 % Total liabilities 1,966,840 2,054,358 (87,518 ) (4.26 )% SHAREHOLDERS' EQUITY: Common shares 188,212 186,937 1,275 0.68 % Retained earnings 151,938 141,290 10,648 7.54 % Treasury shares, at cost (56,071 ) (56,002 ) (69 ) 0.12 % Accumulated other comprehensive loss, net of taxes (10,150 ) (19,189 ) 9,039 (47.11 )% Total shareholders' equity 273,929 253,036 20,893 8.26 % Total liabilities and shareholders' equity $ 2,240,769 2,307,394 (66,625 ) (2.89 )% NM - Not Meaningful -35- Table of Contents LCNB CORP.
Information summarizing the regulatory capital of the Bank at December 31, 2024 and 2023 and corresponding regulatory minimum requirements is included in Note 15 - Regulatory Matters and Impact on Payment of Dividends. The FDIC, the insurer of deposits in financial institutions, has adopted a risk-based insurance premium system based in part on an institution's capital adequacy.
Information summarizing the regulatory capital of the Bank at December 31, 2025 and 2024 and corresponding regulatory minimum requirements is included in Note 15 - Regulatory Matters and Impact on Payment of Dividends. The FDIC, the insurer of deposits in financial institutions, has adopted a risk-based insurance premium system based in part on an institution's capital adequacy.
LCNB experienced no liquidity or operational problems as a result of current liquidity levels. Management believes LCNB has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short and long-term. -35- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
LCNB experienced no liquidity or operational problems as a result of current liquidity levels. Management believes LCNB has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short and long-term. -37- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
Partially offsetting the net increase in 2024 was a $455,000 gain recognized on the sale of an office building that was closed as a result of LCNB's office consolidation strategy, which was netted against other non-interest expense for accounting purposes.
Partially offsetting the net increase in 2024 was a $455 thousand gain recognized on the sale of an office building that was closed as a result of LCNB's office consolidation strategy, which was netted against other non-interest expense for accounting purposes.
(2) Change in interest income from non-taxable investment securities is computed based on interest income determined on a taxable-equivalent yield basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 21%. 2024 vs. 2023.
(2) Change in interest income from non-taxable investment securities is computed based on interest income determined on a taxable-equivalent yield basis. Interest income has been divided by a factor comprised of the complement of the incremental tax rate of 21%. 2025 vs. 2024.
Included in these gains for the 2024 period were an $843,000 loss on the sale of approximately $48.9 million of below market rate loans acquired from CNNB and a $359,000 gain on the sale of approximately $29.8 million of below market rate loans predominately acquired from EFBI.
Included in these gains for the 2024 period were an $843 thousand loss on the sale of approximately $48.9 million of below market rate loans acquired from CNNB and a $359 thousand gain on the sale of approximately $29.8 million of below market rate loans predominately acquired from EFBI.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Income Taxes LCNB's effective tax rates for the years ended December 31, 2024, 2023, and 2022 were 15.5%, 17.2%, and 17.9%, respectively.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Income Taxes LCNB's effective tax rates for the years ended December 31, 2025, 2024, and 2023 were 17.9%, 15.5%, and 17.2%, respectively.
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. -38- Table of Contents LCNB CORP. AND SUBSIDIARIES
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. -40- Table of Contents LCNB CORP. AND SUBSIDIARIES
The increase in total interest expense was primarily due to a $13,937,000 increase in interest paid on IRA and time certificates due to a $247.9 million increase in average balances and to a 113 basis point increase in the average rate paid.
The increase in total interest expense was primarily due to a $13.9 million increase in interest paid on IRA and time certificates due to a $247.9 million increase in average balances and to a 113 basis point increase in the average rate paid.
(4) The net interest margin is the taxable-equivalent net interest income divided by average interest-earning assets. -28- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
(4) The net interest margin is the taxable-equivalent net interest income divided by average interest-earning assets. -30- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
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. Total remaining borrowing capacity with the FHLB at December 31, 2024 was approximately $115.4 million.
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. Total remaining borrowing capacity with the FHLB at December 31, 2025 was approximately $149.1 million.
The increase in total interest income was due primarily to a $24,583,000 increase in interest income from loans due to a $297.7 million increase in average loans and to a 56 basis point increase in the average rate earned.
The increase in total interest income was due primarily to a $24.6 million increase in interest income from loans due to a $297.7 million increase in average loans and to a 56 basis point increase in the average rate earned.
Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the items described below to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new information becomes available. Business Combinations.
Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the items described below to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new information becomes available. Allowance for Credit Losses.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Commitments to extend credit at December 31, 2024 totaled $290.5 million and are more fully described in Note 14 - Commitments and Contingent Liabilities to LCNB's consolidated financial statements.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Commitments to extend credit at December 31, 2025 totaled $262.2 million and are more fully described in Note 14 - Commitments and Contingent Liabilities to LCNB's consolidated financial statements.
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.
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 2023 and 2022 periods did not include mortality proceeds. BOLI income also increased to a lesser extent due to insurance policies acquired in the mergers with EFBI and CNNB. • Net gains from sales of loans were greater during 2024 and 2023 primarily due to a higher volume of residential real estate loans sold.
BOLI income also increased to a lesser extent from 2023 to 2024 and 2025 due to insurance policies acquired in the mergers with EFBI and CNNB. • Net gains from sales of loans were greater during 2025 and 2024 primarily due to a higher volume of residential real estate loans sold.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Non-Interest Income A comparison of non-interest income for 2024, 2023, and 2022 is as follows: Increase (Decrease) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (In thousands) Fiduciary income $ 8,445 7,091 6,468 1,354 623 Service charges and fees on deposit accounts 6,759 5,856 6,190 903 (334 ) Net losses on sales of debt securities (214 ) — — (214 ) — Bank owned life insurance income 1,665 1,136 1,074 529 62 Net gains from sales of loans 3,433 697 196 2,736 501 Other operating income 316 631 360 (315 ) 271 Total non-interest income $ 20,404 15,411 14,288 4,993 1,123 Reasons for changes include: • Fiduciary income increased in 2024 and 2023 primarily due to increases in the fair values of trust and brokerage assets managed, on which fees are based.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Non-Interest Income A comparison of non-interest income for 2025, 2024, and 2023 is as follows: Increase (Decrease) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 (In thousands) Fiduciary income $ 9,531 8,445 7,091 1,086 1,354 Service charges and fees on deposit accounts 7,384 6,759 5,856 625 903 Net losses on sales of debt securities — (214 ) — 214 (214 ) Bank owned life insurance income 1,422 1,665 1,136 (243 ) 529 Net gains from sales of loans 2,937 3,433 697 (496 ) 2,736 Other operating income 501 316 631 185 (315 ) Total non-interest income $ 21,775 20,404 15,411 1,371 4,993 Reasons for changes include: • Fiduciary income increased in 2025, 2024, and 2023, primarily due to increases in the fair values of trust and brokerage assets managed, on which fees are based.
The difference between the statutory rate of 21% and the effective tax rate 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 netted with the net impact of non-deductible merger costs for 2023 and 2024.
The difference between the statutory rate of 21% and the effective tax rate 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.
Average loans increased due to organic growth in the portfolio in addition to loans acquired through mergers with CNNB in quarter four of 2023 and EFBI in quarter two of 2024.
Average loans increased due to organic growth in the portfolio in addition to loans acquired through the merger with CNNB in the fourth quarter of 2023 and EFBI in the second quarter of 2024.
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.
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 of the Board of Directors and the Board of Directors.
The increases in fair value were due to the opening of new Wealth Management customer accounts and to an increase in the market values of managed assets. • Service charges and fees on deposit accounts increased during 2024 primarily due to increases in check card income and fee income received on the ICS product, partially offset by a decrease in overdraft fees and deposit account fees in general.
The increases in fair value were due to the opening of new Wealth Management customer accounts and to an increase in the market values of managed assets. • Service charges and fees on deposit accounts increased during 2025 primarily due to an increased volume in overdraft fees collected and secondarily to an increase in fee income received on the ICS product.
These increases were partially offset by decreased pension and health insurance expenses and to a higher amount of personnel expenses deferred during 2023 as a cost of loan originations. • Occupancy expense, net increased during 2024 primarily due to increased utility and depreciation expenses caused by the additional offices acquired from EFBI and CNNB.
These increases were partially offset by decreased pension and health insurance expenses and to a higher amount of personnel expenses deferred during 2023 as a cost of loan originations. • Occupancy expense, net increased during 2025 primarily due to increased real estate taxes and depreciation.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Years ended December 31, 2024 2023 2022 Average Interest Average Average Interest Average Average Interest Average Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate Balance Paid Rate (Dollars in thousands) Loans (1) $ 1,765,672 $ 96,477 5.46 % 1,467,981 71,894 4.90 % 1,380,272 59,247 4.29 % Interest-bearing demand deposits 15,486 890 5.75 % 13,039 734 5.63 % 9,027 166 1.84 % Interest-bearing time deposits 61 — 0.00 % — — 0.00 % — — 0.00 % Federal Reserve Bank stock 6,143 369 6.01 % 4,722 283 5.99 % 4,652 279 6.00 % Federal Home Loan Bank stock 19,460 1,641 8.43 % 8,293 590 7.11 % 4,716 196 4.16 % Investment securities: Equity securities 5,012 184 3.67 % 3,879 175 4.51 % 4,451 85 1.91 % Debt securities, taxable 261,856 4,847 1.85 % 277,157 5,235 1.89 % 293,700 5,027 1.71 % Debt securities, non-taxable (2) 19,005 768 4.04 % 24,031 871 3.62 % 27,532 953 3.46 % Total earning assets 2,092,695 105,176 5.03 % 1,799,102 79,782 4.43 % 1,724,350 65,953 3.82 % Non-earning assets 267,894 210,509 196,995 Allowance for credit losses (11,263 ) (8,046 ) (5,629 ) Total assets $ 2,349,326 2,001,565 1,915,716 Interest-bearing demand and money market deposits $ 607,144 12,877 2.12 % 535,865 7,850 1.46 % 516,949 1,372 0.27 % Savings deposits 368,401 1,028 0.28 % 398,299 725 0.18 % 449,841 618 0.14 % IRA and time certificates 481,516 21,933 4.55 % 233,604 7,996 3.42 % 172,119 1,692 0.98 % Short-term borrowings 18,987 1,117 5.88 % 75,383 4,060 5.39 % 14,482 416 2.87 % Long-term debt 156,683 7,265 4.64 % 56,798 2,619 4.61 % 17,910 613 3.42 % Total interest-bearing liabilities 1,632,731 44,220 2.71 % 1,299,949 23,250 1.79 % 1,171,301 4,711 0.40 % Noninterest-bearing demand deposits 450,147 472,232 513,400 Other liabilities 20,880 21,557 22,744 Capital 245,568 207,827 208,271 Total liabilities and capital $ 2,349,326 2,001,565 1,915,716 Net interest rate spread (3) 2.32 % 2.64 % 3.42 % Net interest income and net interest margin on a tax equivalent basis (4) $ 60,956 2.91 % 56,532 3.14 % 61,242 3.55 % Ratio of interest-earning assets to interest-bearing liabilities 128.17 % 138.40 % 147.22 % (1) Includes non-accrual loans if any.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Years ended December 31, 2025 2024 2023 Average Interest Average Average Interest Average Average Interest Average Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Balance Paid Rate Balance Paid Rate Balance Paid Rate (Dollars in thousands) Loans (1) $ 1,705,520 $ 94,313 5.53 % 1,765,672 96,477 5.46 % 1,467,981 71,894 4.90 % Interest-bearing demand deposits 9,592 577 6.02 % 15,486 880 5.68 % 13,039 734 5.63 % Interest-bearing time deposits 443 14 3.16 % 401 10 2.49 % — — 0.00 % Federal Reserve Bank stock 6,405 384 6.00 % 6,143 369 6.01 % 4,722 283 5.99 % Federal Home Loan Bank stock 20,710 1,785 8.62 % 19,460 1,641 8.43 % 8,293 590 7.11 % Investment securities: Equity securities 5,064 173 3.42 % 5,012 184 3.67 % 3,879 175 4.51 % Debt securities, taxable 247,671 4,876 1.97 % 261,856 4,847 1.85 % 277,157 5,235 1.89 % Debt securities, non-taxable (2) 17,870 791 4.43 % 19,005 768 4.04 % 24,031 871 3.62 % Total earning assets 2,013,275 102,913 5.11 % 2,093,035 105,176 5.03 % 1,799,102 79,782 4.43 % Non-earning assets 270,348 267,554 210,509 Allowance for credit losses (12,107 ) (11,263 ) (8,046 ) Total assets $ 2,271,516 2,349,326 2,001,565 Interest-bearing demand and money market deposits $ 609,615 9,686 1.59 % 607,144 12,877 2.12 % 535,865 7,850 1.46 % Savings deposits 361,650 805 0.22 % 368,401 1,028 0.28 % 398,299 725 0.18 % IRA and time certificates 437,913 16,657 3.80 % 481,516 21,933 4.55 % 233,604 7,996 3.42 % Short-term borrowings 47 3 6.38 % 18,987 1,117 5.88 % 75,383 4,060 5.39 % Long-term debt 110,324 5,374 4.87 % 156,683 7,265 4.64 % 56,798 2,619 4.61 % Total interest-bearing liabilities 1,519,549 32,525 2.14 % 1,632,731 44,220 2.71 % 1,299,949 23,250 1.79 % Noninterest-bearing demand deposits 468,117 450,147 472,232 Other liabilities 19,880 20,880 21,557 Capital 263,970 245,568 207,827 Total liabilities and capital $ 2,271,516 2,349,326 2,001,565 Net interest rate spread (3) 2.97 % 2.32 % 2.64 % Net interest income and net interest margin on a tax equivalent basis (4) $ 70,388 3.50 % 60,956 2.91 % 56,532 3.14 % Ratio of interest-earning assets to interest-bearing liabilities 132.49 % 128.19 % 138.40 % (1) Includes non-accrual loans if any.
On May 27, 2022, LCNB's Board of Directors authorized a share repurchase program (the “Program”). Under the terms of the Program, LCNB is authorized to repurchase up to 500,000 of its outstanding common shares. The Program replaced and superseded LCNB’s prior share repurchase program, which was adopted on August 24, 2020.
On February 27, 2023, LCNB's Board of Directors authorized the Program, which replaced and superseded LCNB's prior share repurchase program, which was adopted on May 27, 2022 and expired on or around December 31, 2022. Under the terms of the Program, LCNB is authorized to repurchase up to 500 thousand of its outstanding common shares.
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.
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.
The effective tax rate for 2024 was lower due to tax-exempt items not decreasing in proportion to the overall decrease in earnings.
The effective tax rate for 2024 was 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.
Adjustments recorded during this period are recognized in the current reporting period. 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.
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.
The following table provides information concerning LCNB's commitments at December 31, 2024: Amount of Commitment Expiration Per Period Total Over 1 Over 3 Amounts 1 year through 3 through 5 More than Committed or less years years 5 years (In thousands) Commitments to extend credit $ 31,492 31,492 — — — Unused lines of credit 259,015 76,110 73,506 17,159 92,240 Standby letters of credit 5 5 — — — Total $ 290,512 107,607 73,506 17,159 92,240 Capital Resources The Bank is required by banking regulators to meet certain minimum levels of capital adequacy.
The following table provides information concerning LCNB's commitments at December 31, 2025: Amount of Commitment Expiration Per Period Total Over 1 Over 3 Amounts 1 year through 3 through 5 More than Committed or less years years 5 years (In thousands) Commitments to extend credit $ 36,427 36,427 — — — Unused lines of credit 225,773 68,573 46,527 26,158 84,515 Standby letters of credit 5 5 — — — Total $ 262,205 105,005 46,527 26,158 84,515 Capital Resources The Bank is required by banking regulators to meet certain minimum levels of capital adequacy.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Non-Interest Expense A comparison of non-interest expense for 2024, 2023, and 2022 is as follows: Increase (Decrease) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 (In thousands) Salaries and employee benefits $ 35,170 29,108 28,483 6,062 625 Equipment expenses 1,584 1,616 1,629 (32 ) (13 ) Occupancy expense, net 3,725 3,301 3,067 424 234 State financial institutions tax 1,881 1,628 1,740 253 (112 ) Marketing 1,047 1,101 1,184 (54 ) (83 ) Amortization of intangibles 1,142 532 478 610 54 FDIC premiums 1,895 932 530 963 402 Computer maintenance and supplies 1,425 1,358 1,114 67 244 Contracted services 3,212 2,776 2,503 436 273 Other real estate owned, net 5 4 (866 ) 1 870 Merger-related expenses 3,442 4,656 — (1,214 ) 4,656 Other non-interest expense 8,748 7,411 8,272 1,337 (861 ) Total non-interest expense $ 63,276 54,423 48,134 8,853 6,289 Reasons for changes include: • Salaries and employee benefits were 20.8% greater in 2024 than in 2023 and 2.2% greater in 2023 than in 2022.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Non-Interest Expense A comparison of non-interest expense for 2025, 2024, and 2023 is as follows: Increase (Decrease) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 (In thousands) Salaries and employee benefits $ 35,496 35,170 29,108 326 6,062 Equipment expenses 1,517 1,584 1,616 (67 ) (32 ) Occupancy expense, net 3,983 3,725 3,301 258 424 State financial institutions tax 1,716 1,881 1,628 (165 ) 253 Marketing 1,223 1,047 1,101 176 (54 ) Amortization of intangibles 1,075 1,142 532 (67 ) 610 FDIC premiums 1,487 1,895 932 (408 ) 963 Computer maintenance and supplies 1,506 1,425 1,358 81 67 Contracted services 3,520 3,212 2,776 308 436 Merger-related expenses 140 3,442 4,656 (3,302 ) (1,214 ) Other non-interest expense 10,246 8,753 7,415 1,493 1,338 Total non-interest expense $ 61,909 63,276 54,423 (1,367 ) 8,853 Reasons for changes include: • Salaries and employee benefits were 0.9% greater in 2025 than in 2024 and 20.8% greater in 2024 than in 2023.
Other non-interest expense decreased during 2023 primarily due to a $425,000 gain recognized on the sale of an office building that was closed as a result of LCNB's office consolidation strategy, which was netted against other non-interest expense for accounting purposes.
Other non-interest expense for 2023 was partially offset by a $425 thousand gain recognized on the sale of an office building that was closed as a result of LCNB's office consolidation strategy, which was netted against other non-interest expense for accounting purposes. -34- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
For the years ended December 31, 2024 vs. 2023 2023 vs. 2022 Increase (decrease) due to Increase (decrease) due to Volume Rate Total Volume Rate Total (In thousands) Interest income attributable to: Loans (1) $ 15,653 8,930 24,583 3,930 8,717 12,647 Interest-bearing demand deposits 140 16 156 101 467 568 Interest-bearing time deposits — — — — — — Federal Reserve Bank stock 85 1 86 4 — 4 Federal Home Loan Bank stock 924 127 1,051 203 191 394 Investment securities: Equity securities 45 (36 ) 9 (12 ) 102 90 Debt securities, taxable (285 ) (103 ) (388 ) (293 ) 501 208 Debt securities, non-taxable (2) (196 ) 93 (103 ) (125 ) 43 (82 ) Total interest income 16,366 9,028 25,394 3,808 10,021 13,829 Interest expense attributable to: Interest-bearing demand and money market deposits 1,151 3,876 5,027 52 6,426 6,478 Savings deposits (58 ) 361 303 (77 ) 184 107 IRA and time certificates 10,625 3,312 13,937 793 5,511 6,304 Short-term borrowings (3,287 ) 344 (2,943 ) 3,016 628 3,644 Long-term debt 4,631 15 4,646 1,729 277 2,006 Total interest expense 13,062 7,908 20,970 5,513 13,026 18,539 Net interest income $ 3,304 1,120 4,424 (1,705 ) (3,005 ) (4,710 ) (1) Non-accrual loans, if any, are included in average loan balances.
For the years ended December 31, 2025 vs. 2024 2024 vs. 2023 Increase (decrease) due to Increase (decrease) due to Volume Rate Total Volume Rate Total (In thousands) Interest income attributable to: Loans (1) $ (3,316 ) 1,152 (2,164 ) 15,653 8,930 24,583 Interest-bearing demand deposits (352 ) 49 (303 ) 140 16 156 Interest-bearing time deposits 1 3 4 — — — Federal Reserve Bank stock 16 (1 ) 15 85 1 86 Federal Home Loan Bank stock 107 37 144 924 127 1,051 Investment securities: Equity securities 2 (13 ) (11 ) 45 (36 ) 9 Debt securities, taxable (270 ) 299 29 (285 ) (103 ) (388 ) Debt securities, non-taxable (2) (48 ) 71 23 (196 ) 93 (103 ) Total interest income (3,860 ) 1,597 (2,263 ) 16,366 9,028 25,394 Interest expense attributable to: Interest-bearing demand and money market deposits 52 (3,243 ) (3,191 ) 1,151 3,876 5,027 Savings deposits (19 ) (204 ) (223 ) (58 ) 361 303 IRA and time certificates (1,870 ) (3,406 ) (5,276 ) 10,625 3,312 13,937 Short-term borrowings (1,202 ) 88 (1,114 ) (3,287 ) 344 (2,943 ) Long-term debt (2,242 ) 351 (1,891 ) 4,631 15 4,646 Total interest expense (5,281 ) (6,414 ) (11,695 ) 13,062 7,908 20,970 Net interest income $ 1,421 8,011 9,432 3,304 1,120 4,424 (1) Non-accrual loans, if any, are included in average loan balances.
Critical Accounting Estimates The accounting policies of LCNB conform to U.S. generally accepted accounting principles and require management to make estimates and develop assumptions that affect the amounts reported in the financial statements and related footnotes. These estimates and assumptions are based on information available to management as of the date of the financial statements.
The 2025 Plan will terminate on May 19, 2035 and is subject to earlier termination by the Compensation Committee. Critical Accounting Estimates The accounting policies of LCNB conform to U.S. generally accepted accounting principles and require management to make estimates and develop assumptions that affect the amounts reported in the financial statements and related footnotes.
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 64.6% of total loans at December 31, 2024.
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 64.4% of total loans at December 31, 2025. Loans secured by commercial real estate consist of owner-occupied, non-owner-occupied, farmland, multi-family, and construction loans.
Actual results could differ significantly from management’s estimates. As this information changes, management’s estimates and assumptions used to prepare LCNB’s financial statements and related disclosures may also change. The most significant accounting policies followed by LCNB are presented in Note 1 of the Notes to Consolidated Financial Statements included herein.
These estimates and assumptions are based on information available to management as of the date of the financial statements. Actual results could differ significantly from management’s estimates. As this information changes, management’s estimates and assumptions used to prepare LCNB’s financial statements and related disclosures may also change.
Net interest income on a fully tax-equivalent basis for 2024 totaled $60,956,000, an increase of $4,424,000 from 2023. The increase resulted from an increase in total taxable-equivalent interest income of $25,394,000, which was partially offset by an increase in total interest expense of $20,970,000.
Net interest income on a fully tax-equivalent basis for 2025 totaled $70.4 million, an increase of $9.4 million from 2024. The increase resulted from a decrease in total interest expense of $11.7 million, partially offset by a decrease in total taxable-equivalent interest income of $2.3 million.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) The 2015 Ownership Incentive Plan (the "2015 Plan") was approved by LCNB's shareholders at the annual meeting on April 28, 2015 and allows for stock-based awards to eligible employees, as determined by the Compensation Committee of the Board of Directors.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) The 2025 Plan was approved by LCNB's shareholders at the annual meeting on May 19, 2025 and superseded the 2015 Ownership Incentive Plan, which terminated on April 28, 2025.
The increase in total interest expense was primarily due to a $6,478,000 increase in interest paid on interest-bearing demand and money market deposits, a $6,304,000 increase in interest paid on IRA and time certificates, a $3,644,000 increase in interest paid on short-term borrowings, and a $2,006,000 increase in interest paid on long-term debt.
The decrease in total interest expense was primarily due to a $5.3 million decrease in interest paid on IRA and time certificates and to a $3.2 million decrease in interest paid on interest-bearing demand and money market deposit accounts.
The decrease resulted from an increase in total taxable-equivalent interest income of $13,829,000, which was more than offset by an increase in total interest expense of $18,539,000.
The increase resulted from an increase in total taxable-equivalent interest income of $25.4 million, which was partially offset by an increase in total interest expense of $21.0 million.
The following table provides a breakdown of amortized cost of commercial real estate loans by property-type classification as of December 31, 2024 , excluding loans which are junior in lien or covered by collateral secured with varying classes of assets (dollars in thousands): Amount % of Total Multi-family $ 277,910 28 % Retail 161,204 16 % Office 123,462 12 % Mixed Use 95,117 10 % Hotel/Motel 81,772 8 % Self storage 46,115 5 % Warehouse (one tenant) 44,835 4 % Light Industrial 33,151 3 % Warehouse (more than one tenant) 21,182 2 % Healthcare Facilities 19,995 2 % Manufacturing 19,827 2 % Dental 12,987 1 % Other 70,881 7 % Total $ 1,008,438 100 % -34- Table of Contents LCNB CORP.
The following table provides a breakdown of amortized cost of commercial real estate loans by property-type classification as of December 31, 2025 , excluding loans which are junior in lien or covered by collateral secured with varying classes of assets (dollars in thousands): Amount % of Total Multi-family $ 274,742 26 % Retail 147,030 14 % Office 126,175 12 % Mixed Use 94,378 9 % Hotel/Motel 90,887 9 % Other 70,187 7 % Self storage 48,568 5 % Warehouse (one tenant) 42,113 4 % Farmland 35,561 3 % Light Industrial 29,385 3 % Warehouse (more than one tenant) 28,752 3 % Manufacturing 24,414 2 % Healthcare Facilities 19,105 2 % Dental 11,334 1 % Total $ 1,042,631 100 % -36- Table of Contents LCNB CORP.
Awards may be made in the form of stock options, appreciation rights, restricted shares, and/or restricted share units. The 2015 Plan provides for the issuance of up to 450,000 shares. The 2015 Plan will terminate on April 28, 2025 and is subject to earlier termination by the Compensation Committee.
Both plans allows for stock-based awards to eligible employees, as determined by the Compensation Committee of the Board of Directors. Awards may be made in the form of stock options, appreciation rights, restricted shares, and/or restricted share units. The 2025 Plan provides for the issuance of up to 600 thousand shares.
The following table provides a breakdown of amortized cost of commercial real estate loans by real estate collateral location as of December 31, 2024 , excluding loans which are junior in lien or covered by collateral secured with varying classes of assets (dollars in thousands): Amount % of Total Franklin County, Ohio $ 305,272 30 % Hamilton County, Ohio 202,538 20 % Montgomery County, Ohio 92,847 9 % Butler County, Ohio 88,221 9 % Warren County, Ohio 81,338 8 % Delaware County, Ohio 39,900 4 % Greene County, Ohio 31,941 3 % Boone County, Kentucky 29,166 3 % Kenton County, Kentucky 20,714 2 % Clermont County, Ohio 18,912 2 % Licking County, Ohio 14,806 2 % Fairfield County, Ohio 9,679 1 % Ross County, Ohio 8,662 1 % Other, Ohio 53,149 5 % Other, Kentucky 7,065 1 % Other, Indiana 3,390 0 % Other, West Virginia 838 0 % Total $ 1,008,438 100 % Liquidity LCNB Corp. depends on dividends from the Bank for the majority of its liquid assets, including the cash needed to pay dividends to its shareholders.
The following table provides a breakdown of amortized cost of commercial real estate loans by real estate collateral location as of December 31, 2025 , excluding loans which are junior in lien or covered by collateral secured with varying classes of assets (dollars in thousands): Amount % of Total Franklin County, Ohio $ 296,096 28 % Hamilton County, Ohio 184,090 17 % Montgomery County, Ohio 99,729 9 % Butler County, Ohio 89,310 8 % Warren County, Ohio 83,338 8 % Delaware County, Ohio 61,686 6 % Other counties, Ohio 40,631 4 % Greene County, Ohio 38,476 4 % Boone County, Kentucky 36,751 4 % Clermont County, Ohio 19,313 2 % Preble County, Ohio 17,986 2 % Licking County, Ohio 17,662 2 % Kenton County, Kentucky 15,079 1 % Fayette County, Ohio 10,942 1 % Ross County, Ohio 9,265 1 % Fairfield County, Ohio 9,045 1 % Other counties, Indiana 6,585 1 % Other counties, Kentucky 6,647 1 % Total $ 1,042,631 100 % Liquidity LCNB Corp. depends on dividends from the Bank for the majority of its liquid assets, including the cash needed to pay dividends to its shareholders.
Interest paid on IRA and time certificates increased due to a $61.5 million increase in average deposit balances and to a 244 basis point increase in the average rate paid. Interest paid on short-term borrowings increased due to a $60.9 million increase in average balances and to a 251 basis point increase in the average rate paid.
Interest on IRA and time certificates decreased due to a $43.6 million decrease in average balances and to a 75 basis point decrease in the average rate paid.
Charge-offs during 2024 were greater because of a $589,000 charge-off on a commercial & industrial loan. -30- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
Revisions may be necessary as more information becomes available. Net charge-offs for 2025, 2024, and 2023 totaled $273 thousand, $741 thousand, and $185 thousand, respectively. Charge-offs during 2024 were greater because of a $589 thousand charge-off on a commercial & industrial loan. -32- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
The increase in total interest income was due primarily to a $12,647,000 increase in interest income from loans due to an $87.7 million increase in average loans and to a 61 basis point increase in the average rate earned. Average loans increased due to organic growth in the portfolio and to loans acquired through the merger with CNNB.
The decrease in total interest income was due primarily to a $2.2 million decrease in interest income from loans due to a $60.2 million decrease in average loans, partially offset by a 7 basis point increase in the average rate earned.
Interest paid on interest-bearing demand and money market deposits increased due to an $18.9 million increase in average balances and to a 119 basis point increase in the average rate paid.
Interest paid on interest-bearing demand and money market deposit accounts decreased due to a 53 basis point decrease in the average rate paid, partially offset by $2.5 million increase in average deposit balances. In addition, interest paid on short-term borrowings and long-term debt decreased due to decreases in average balances outstanding.
Maintenance and repair costs related to LCNB's office facilities also contributed to the increase.
Maintenance and repair costs related to LCNB's office facilities also contributed to the increase. • Amortization of intangibles increased during 2024 as compared to 2023 due to the amortization of core deposit intangibles recognized from the acquisitions of EFBI and CNNB.
LCNB recorded provisions for credit losses and unfunded commitments totaling $1,962,000 for 2024, compared to a $2,077,000 provision for 2023 and a $250,000 provision for 2022. Included in the provision for credit losses for 2024 and 2023 were $763,000 and a $1,722,000, respectively, related to non-PCD loans acquired through the EFBI and CNNB acquisitions.
Included in the provision for credit losses for 2024 and 2023 were $763 thousand and $1.7 million, respectively, related to non-PCD loans acquired through the EFBI and CNNB acquisitions. 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.
The increased rates paid on interest-bearing liabilities and the increased yield earned on interest-earning assets is largely the result of fluctuations in market rates. 2023 vs. 2022. Net interest income on a fully tax-equivalent basis for 2023 totaled $56,532,000, a decrease of $4,710,000 from 2022.
The increased rates paid on interest-bearing liabilities and the increased yield earned on interest-earning assets is largely the result of fluctuations in market rates. -31- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
The tax decreased in 2023 as compared to 2022 due to reductions in capital caused by treasury share purchases during 2022 and a decrease in the fair value of debt securities during 2022, which was recorded net of taxes as an increase in accumulated other comprehensive loss, a component of capital. • Amortization of intangibles increased during 2024 as compared to 2023 due to the amortization of core deposit intangibles recognized from the acquisitions of EFBI and CNNB. • FDIC insurance premiums increased during 2024 due to a higher assessment base, partially reflecting increased assets resulting from the acquisitions of EFBI and CNNB, and to an increase in the assessment rate charged.
Amortization decreased during 2025 because the core deposit intangibles related to the BNB Bancorp, Inc. and Columbus First Bancorp, Inc. acquisitions were amortized in full during the year. • FDIC insurance premiums increased during 2024 due to a higher assessment base, partially reflecting increased assets resulting from the acquisitions of EFBI and CNNB, and to increases in the assessment rate charged.
Service charges and fees on deposit accounts decreased during 2023 primarily due to decreases in most fee categories, including fees received from check cards, ATM usage fees, and deposit account fees in general. • Net losses from sales of debt securities during 2024 reflect losses recognized on sales of municipal securities with amortized cost bases of approximately $9.8 million. • Bank-owned life insurance ("BOLI") income increased during 2024 primarily due to mortality proceeds recognized.
A higher volume of check cards were outstanding during 2024 due to the mergers with EFBI and CNNB. • Net losses from sales of debt securities during 2024 reflect losses recognized on sales of municipal securities with amortized cost bases of approximately $9.8 million.
LCNB reduced overdraft fees from $35 per occurrence to $25 effective November 1, 2023. A higher volume of check cards were outstanding during 2024 due to the mergers with EFBI and CNNB.
Service charges and fees on deposit accounts increased during 2024 primarily due to increases in check card income and fee income received on the ICS product, partially offset by a decrease in overdraft fees and deposit account fees in general. LCNB reduced overdraft fees from $35 per occurrence to $25 effective November 1, 2023.
Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Reasons for changes include: • Debt securities, available-for-sale, decreased due to maturities, paydowns, sales, and calls, partially offset by purchases of new securities and increases in market valuation. • FHLB stock increased due to the addition of stock previously held by EFBI and to the purchase of additional stock to support additional borrowings and loans sold to the FHLB, partially offset by the FHLB's repurchase of excess stock. • Net loans decreased primarily due to loans transferred to the held-for-sale category and later sold, partially offset by the addition of loans acquired through the merger with EFBI.
AND SUBSIDIARIES Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Reasons for changes include: • Debt securities, available-for-sale, decreased due to maturities and paydowns, partially offset by a decrease in unrealized losses.
The 10b5-1 trading plan is administered by an independent broker and is subject to price, market volume and timing restrictions. The Program expired on or around December 31, 2022 and was replaced with a new share repurchase program that was authorized by the Board of Directors on February 27, 2023.
The 10b5-1 trading plan is administered by an independent broker and is subject to price, market volume and timing restrictions. -38- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
The new debt was used to pay down short-term borrowings and to support growth in liquidity and the loan portfolio. • Common shares increased primarily because 868,001 shares of LCNB common stock valued at $12,187,000 were issued to EFBI shareholders to effectuate the merger. • Accumulated other comprehensive loss, net of taxes decreased because of market-driven partial recoveries in the fair value of LCNB's available-for-sale debt securities investments.
Prepayment penalties incurred were minimal. • Retained earnings increased due to net income retained during 2025. • Accumulated other comprehensive loss, net of taxes decreased because of market-driven partial recoveries in the fair value of LCNB's available-for-sale debt securities investments. LCNB's loan portfolio represents its largest asset category and is its most significant source of interest income.
Other operating income increased in 2023 as compared to 2022 primarily because of realized and unrealized net gains on equity securities, reflecting a partial recovery in market values. -31- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
Other operating income for 2025 increased primarily due to a decrease in amortization of capitalized mortgage servicing rights. -33- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
No new policies were purchased during 2024. • Other assets increased primarily due to deferred tax assets recorded as a result of the EFBI merger. • Total deposits increased due to a combination of deposits acquired through the merger with EFBI and through organic deposit growth, partially offset by a decrease in funds invested in the ICS demand reciprocal product.
No new policies were purchased during 2025. • Other assets, net decreased primarily due to a reduction in deferred tax assets resulting from utilization of prior-year loss carryforwards and a decline in unrealized losses on available-for-sale debt securities. • Total interest-bearing deposits decreased primarily due to decreases in IRA and time certificate deposits and to decreases in interest-bearing demand and money market deposit accounts, partially offset by an increase in deposits obtained through the ICS service.
Removed
Interest paid on long-term debt increased due to a $38.9 million increase in average balances and to a 119 basis point increase in the average rate paid. -29- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
Added
The decrease in average IRA and time certificate balances and the corresponding decrease in average rates reflects a strategic reduction in higher-cost certificates of deposit and IRA balances as part of LCNB's funding optimization strategy. 2024 vs. 2023. Net interest income on a fully tax-equivalent basis for 2024 totaled $61.0 million, an increase of $4.4 million from 2023.
Removed
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.
Added
LCNB recorded provisions for credit losses and unfunded commitments totaling $1.9 million for 2025, $2.0 million for 2024 and $2.1 million for 2023. The provision for 2025 includes $1.4 million to fully reserve for two commercial and industrial loans to the same borrower within the logistics sector.
Removed
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. Net charge-offs for 2024, 2023, and 2022 totaled $741,000, $185,000, and $110,000, respectively.
Added
Management does not believe there will be any additional reserves associated with this loan and anticipates the loan will be charged off during the first quarter of 2026. Management believes this event does not reflect the overall strength, diversity, or performance of its loan portfolio or the markets that LCNB serves.
Removed
Occupancy expense, net increased during 2023 due to a higher amount of maintenance and repair costs on LCNB's properties in general as well as incremental expenses related to the CNNB acquisition. • State financial institutions tax, which is based on previous year-end capital levels, increased during 2024 as compared to 2023 due to increases in capital resulting primarily from stock issued for the acquisition of CNNB.
Added
There were no sales of debt securities during 2025 or 2023. • Bank-owned life insurance ("BOLI") income was elevated in 2024 primarily due to mortality proceeds recognized. The 2025 and 2023 periods did not include mortality proceeds.
Removed
FDIC insurance premiums increased in 2023 because of a two basis point increase in the FDIC's initial base deposit insurance assessment rate that took effect at the beginning of that year. • Other real estate owned, net for 2022, is primarily due to a gain recognized on the sale of foreclosed property, slightly offset by other expenses recognized on such property. • Merger- related expenses reflect costs incurred in connection with the acquisitions of EFBI and CNNB. • Other non-interest expense increased in 2024 partially due to increased outside accounting and auditing fees and partially due to smaller increases in various other accounts.
Added
The increase in 2025 was primarily due to increases in miscellaneous employee related costs, largely offset by a decrease in wages and benefits caused by a reduction in the number of employees.
Removed
Other non-interest expense for 2022 included $471,000 in losses from the sales of two closed office buildings. -32- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
Added
Occupancy expense, net increased during 2024 primarily due to increased utility and depreciation expenses caused by the additional offices acquired from EFBI and CNNB.
Removed
Approximately $233 million of single-family residential loans were sold in the secondary market during 2024. • Premises and equipment, net increased primarily due to additional office buildings acquired in the merger with EFBI and the construction of the new downtown Chillicothe Office. • Goodwill increased due to additional goodwill recorded as a result of the merger with EFBI. • Core deposit and other intangibles increased due to the addition of a core deposit intangible obtained in the merger with EFBI. • Bank owned life insurance increased primarily due to additional policies obtained in the merger with EFBI and secondarily due to increases in the cash values of the policies.
Added
FDIC insurance premiums decreased in 2025 because of decreased assessment bases, reflecting decreases in total assets, and to reductions in the assessment rate charged. • Merger- related expenses reflect costs incurred in connection with the acquisitions of EFBI and CNNB. • Other non-interest expense for 2025 includes $265 thousand in impairment charges related to a closed office building that is classified as held-for-sale.
Removed
Most of the deposit growth occurred in the money market deposit and IRA and time certificates products. • Long-term debt increased due to additional advances from the FHLB of Cincinnati.
Added
The remaining net increases for 2025 can be attributed to smaller increases in various other accounts. Other non-interest expense increased in 2024 partially due to increased outside accounting and auditing fees and partially due to smaller increases in various other accounts.
Removed
Loans secured by commercial real estate consist of owner-occupied, non-owner-occupied, farmland, multi-family, and construction loans.
Added
Purchases of new securities during 2025 were minimal. • Loans, net decreased due to timing of borrower payoffs and efforts to rebalance the composition of the portfolio. • Premises and equipment, net decreased due to depreciation and the transfer of the Florence building to premises held-for-sale, which is included in the other assets classification. • Operating lease right-of-use assets and operating lease liabilities increased due the renewal of expiring leases. • Core deposit and other intangibles, net decreased due to amortization of core deposit and mortgage servicing rights intangibles. • Bank owned life insurance increased due to increases in the cash values of the policies.
Removed
The new share repurchase program authorizes the repurchase of up to 500,000 shares of common stock. -36- Table of Contents LCNB CORP. AND SUBSIDIARIES Item 7.
Added
The decline in interest‑bearing balances reflects a strategic decrease of higher‑cost certificates of deposit and IRA balances as part of LCNB’s funding optimization strategy. • Long-term debt decreased due to the early payoff of $50 million in advances bearing a weighted average interest rate of 4.23% from the FHLB of Cincinnati.
Removed
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.
Added
Funds for the payoff were provided by the increase in ICS deposits mentioned above, resulting in an overall decrease in the average interest rate.
Removed
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.
Added
The most significant accounting policies followed by LCNB are presented in Note 1 of the Notes to Consolidated Financial Statements included herein.

… 12 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed6 unchanged
Biggest changeThe changes in net interest income for all rate assumptions are within LCNB’s acceptable ranges. $ Change in % Change in Rate Shock Scenario in Amount Net Interest Net Interest Basis Points (In thousands) Income Income Limits Up 300 $ 77,139 (1,640 ) (2.08 )% 15 % Up 200 77,617 (1,162 ) (1.48 )% 10 % Up 100 77,984 (795 ) (1.01 )% 5 % Base 78,779 — — % — % Down 100 78,687 (92 ) (0.12 )% 5 % Down 200 79,046 267 0.34 % 10 % Down 300 79,428 649 0.82 % 15 % IRSA shows the effect on net interest income during a one-year period only.
Biggest changeThe changes in net interest income for all rate assumptions are within LCNB’s acceptable ranges. $ Change in % Change in Rate Shock Scenario in Amount Net Interest Net Interest Basis Points (In thousands) Income Income Limits Up 300 $ 81,381 1,556 1.95 % 15 % Up 200 81,309 1,484 1.86 % 10 % Up 100 81,374 1,549 1.94 % 5 % Base 79,825 — 0.00 % Down 100 80,626 801 1.00 % 5 % Down 200 80,520 695 0.87 % 10 % Down 300 80,936 1,111 1.39 % 15 % IRSA shows the effect on net interest income during a one-year period only.
As shown below, the December 31, 2024 EVE analysis indicates that an increase in interest rates will have a negative effect on the EVE and that a decrease in interest rates will have a positive effect. The changes in the EVE for all rate assumptions are within LCNB's acceptable ranges.
As shown below, the December 31, 2025 EVE analysis indicates that an increase in interest rates will have a negative effect on the EVE and that a decrease in interest rates will have a positive effect. The changes in the EVE for all rate assumptions are within LCNB's acceptable ranges.
Furthermore, the models do not reflect actions that borrowers, depositors, and management may take in response to changing economic conditions and interest rate levels. -39- Table of Contents LCNB CORP. AND SUBSIDIARIES
Furthermore, the models do not reflect actions that borrowers, depositors, and management may take in response to changing economic conditions and interest rate levels. -41- Table of Contents LCNB CORP. AND SUBSIDIARIES
As shown below, the December 31, 2024 IRSA indicates that an increase in interest rates or a decrease of 100 basis points will have a negative effect on net interest income and a decrease in interest rates of 200 or 300 basis points will have a positive effect on net interest income.
As shown below, the December 31, 2025 IRSA indicates that either an increase or decrease in interest rates will have a positive effect on net interest income.
Rate Shock Scenario in Amount $ Change in % Change in Basis Points (In thousands) EVE EVE Limits Up 300 $ 192,306 (26,009 ) (11.91 )% 25 % Up 200 205,104 (13,211 ) (6.05 )% 20 % Up 100 217,539 (776 ) (0.36 )% 15 % Base 218,315 — — % — % Down 100 238,327 20,012 9.17 % 15 % Down 200 253,234 34,919 15.99 % 20 % Down 300 269,669 51,354 23.52 % 25 % The IRSA and EVE simulations discussed above are not projections of future income or equity and should not be relied on as being indicative of future operating results.
Rate Shock Scenario in Amount $ Change in % Change in Basis Points (In thousands) EVE EVE Limits Up 300 $ 275,209 (53,240 ) (16.21 )% 25 % Up 200 291,755 (36,694 ) (11.17 )% 20 % Up 100 308,360 (20,089 ) (6.12 )% 15 % Base 328,449 — 0.00 % Down 100 340,242 11,793 3.59 % 15 % Down 200 367,742 39,293 11.96 % 20 % Down 300 373,438 44,989 13.70 % 25 % The IRSA and EVE simulations discussed above are not projections of future income or equity and should not be relied on as being indicative of future operating results.

Other LCNB 10-K year-over-year comparisons