LCNB Corp. — Three and Nine Months Ended September 30, 2026 Earnings Summary

Financial Performance

• Net income for the third quarter of 2026 was $7.3 million, a 5.4% increase year-over-year from $6.9 million in 2025; earnings per diluted share were $0.51 compared to $0.49.
• Net income for the nine months ended September 30, 2026, was $19.2 million, up from $17.5 million in the prior year period; earnings per diluted share were $1.35 compared to $1.23.
• Return on average assets (ROAA) for the third quarter was 1.29%.
• Net interest income for the nine months ended September 30, 2026, increased 8.6% year-over-year to $19.7 million (note: text states $19.7M for nine months in header but $58.3M in body; body data used for consistency with detailed breakdown: $58.3 million vs $52.0 million).
• Net interest income for the three months ended September 30, 2026, was $19.7 million, up from $18.1 million in 2025.
• Net interest margin (tax equivalent) for the third quarter was 3.92%, an improvement of 35 basis points from 3.57% in 2025; for the nine months, it was 3.91% compared to 3.43%.
• Non-interest income for the third quarter was $5.3 million, down from $5.7 million in 2025; for the nine months, it was $15.4 million, down from $16.2 million.
• Fiduciary income for the first nine months of 2026 increased 12.7% year-over-year to $7.9 million.
• Non-interest expense for the third quarter was $15.6 million, up from $15.2 million in 2025; for the nine months, it was $0.6 million higher than the prior year.
• Provision for credit losses for the third quarter was $453,000, compared to $211,000 in 2025; for the nine months, it was $3.1 million compared to $426,000.
• Net charge-offs for the third quarter were $727,000 (0.17% of average loans annualized), compared to $169,000 (0.04%) in 2025; for the nine months, net charge-offs were $3.5 million (0.27%) compared to $287,000 (0.02%).
• Tangible book value per share increased 7.2% year-over-year to $13.02 at September 30, 2026.

Guidance and Future Outlook

• Management indicated a focus on translating an enhanced financial position and expanded capabilities into profitable organic growth.
• The company aims to deliver continued value to shareholders through a strengthened financial position and diversified revenue platform.
• Future strategy includes broadening product offerings, deepening existing customer relationships, and reaching more individuals and businesses in Ohio markets.
• Wealth Management is highlighted as a key component for establishing new client relationships and growing assets under management.

Business Segments and Product Lines

• Wealth Management fiduciary income grew 12.7% year-over-year to $7.9 million for the first nine months of 2026.
• Total assets under management reached $4.24 billion at September 30, 2026, up from $4.20 billion in 2025, driven by new customer accounts and increased fair value of managed assets.
• Trust and investments and brokerage accounts increased due to a higher number of new LCNB Wealth Management customer accounts.
• The company completed its first $25 million subordinated debt offering during the quarter to support future growth and expansion strategies.
• Loan origination activity for the quarter totaled $141.0 million, with $18.4 million sold into the secondary market, generating $0.3 million in gains.

Market and Competitive Landscape

• The company serves customers in Southwest and South-Central Ohio across Butler, Clermont, Clinton, Fayette, Franklin, Hamilton, Montgomery, Preble, Ross, and Warren Counties.
• Net interest margin improved 108 basis points over the past two years, rising from 2.84% in Q3 2024 to 3.92% in Q3 2026.
• The company faces competition from both bank and nonbank financial institutions.

Risks and Challenges

• Net charge-offs increased significantly in the third quarter, largely attributable to one participated loan relationship, though the impact was mitigated by prior reserves.
• Nonperforming loans increased to $4.1 million (0.24% of total loans) at September 30, 2026, from $2.0 million (0.12%) in 2025, primarily due to one commercial real estate loan.
• Forward-looking statements identify risks including potential increased loan charge-offs, inadequate allowance for credit losses, and difficulties growing loan and deposit balances.
• Risks also include integration difficulties from future acquisitions, competitive loss of customers, interest rate environment changes, regulatory changes, and technology or data security breaches.

Management Commentary and Tone

• CEO Eric Meilstrup described the third quarter and year-to-date performance as "solid," highlighting the execution of balance sheet optimization and funding discipline strategies.
• Management expressed confidence in the "strengthening of our core earnings power" and the "solid foundation" provided by a diversified revenue platform.
• The tone emphasized a shift from foundational work to a focus on profitable organic growth and leveraging investments in the franchise.

Other Key Points

• Total assets increased 1.7% to $2.28 billion at September 30, 2026.
• Net loans increased 2.2% to $1.70 billion at September 30, 2026.
• Total deposits increased 1.8% to $1.88 billion; excluding a one-time $50 million public funds deposit, deposits would have decreased approximately 0.9% year-over-year.
• Shareholders' equity increased to $282.2 million at September 30, 2026, from $269.9 million in 2025.
• Tangible shareholders' equity increased 7.7% to $185.7 million, primarily driven by higher retained earnings.
• LCNB paid a dividend of $0.22 per share in the third quarter, with $0.66 per share paid year-to-date.
• Gains from sales of loans contributed to non-interest income, though lower service charges and fees partially offset this growth.