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LC

LCNB CORP (LCNB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid fundamentals: diluted EPS was $0.33, up 120% YoY, as net interest margin expanded to 3.25% (highest in seven quarters), and non-interest income rose 32.9% YoY on stronger fiduciary and loan-sale gains .
  • Versus consensus: EPS missed by $0.03 ($0.33 vs $0.36*), while “revenue” (S&P-defined total revenue) materially beat ($21.3M* vs $15.8M*), reflecting lower funding costs and higher loan yields; only two estimates underpin the consensus, so breadth is narrow* .
  • Asset quality remained strong despite higher nonperforming loans ($4.9M; 0.28% of loans), with NPA/TA at 0.21%; tangible book value per share increased to $11.34, and equity/assets reached 11.23% .
  • Management highlighted earlier-than-expected tangible book earn-back from the April 2024 Eagle acquisition and continued balance sheet optimization, positioning LCNB for profitable growth in 2025 .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 3.25%, the highest in seven quarters, driven by reduced rates on interest-bearing liabilities and higher loan yields .
  • Non-interest income increased 32.9% YoY to $5.2M on higher fiduciary income ($2.164M) and $0.841M gains on loan sales; Wealth Management AUM reached a record $1.40B (+7.4% YoY) .
  • Management quote: “The actions we took last year to improve our balance sheet have reduced more expensive borrowings… our highest net interest margin in seven quarters… contributed to a 120% year-over-year increase in earnings per diluted share” — Eric Meilstrup, CEO .

What Went Wrong

  • Sequential profitability moderated: diluted EPS fell from $0.44 in Q4 2024 to $0.33 in Q1 2025 as efficiency ratio worsened (73.33% vs 64.16%) .
  • Nonperforming loans rose YoY to $4.9M (0.28% of loans), with increases tied to one C&I relationship and three residential loans; management does not foresee additional losses given adequate provision .
  • Consensus EPS was narrowly missed (by $0.03*) and estimate breadth is limited (two estimates*), suggesting street expectations were slightly ahead of quarter realities.

Values retrieved from S&P Global.*

Financial Results

Core Income and Profitability

MetricQ1 2024Q4 2024Q1 2025
Net Income ($USD Millions)$1.915 $6.120 $4.609
Diluted EPS ($USD)$0.15 $0.44 $0.33
Net Interest Income ($USD Millions)$13.895 $16.713 $16.299
Non-Interest Income ($USD Millions)$3.929 $5.988 $5.222
Tax-Equivalent NIM (%)2.72% 3.22% 3.25%
Efficiency Ratio (Tax-Equivalent) (%)86.62% 64.16% 73.33%
Provision for Credit Losses ($USD Thousands)$125 $649 $197

Balance Sheet and Capital

MetricQ1 2024Q4 2024Q1 2025
Total Assets ($USD Billions)$2.283 $2.307 $2.303
Total Deposits ($USD Billions)$1.858 $1.878 $1.922
Net Loans ($USD Billions)$1.646 $1.710 $1.706
Loans Held for Sale ($USD Millions)$75.581 $5.556 $6.098
Equity / Assets (%)10.23% 10.97% 11.23%
Loans / Deposits (%)89.12% 91.67% 89.38%
BV / Share ($USD)$17.67 $17.92 $18.26
TBV / Share ($USD)$11.26 $10.96 $11.34

Asset Quality and Wealth

MetricQ1 2024Q4 2024Q1 2025
Nonperforming Loans ($USD Millions)$3.243 $4.618 $4.891
NPL / Total Loans (%)0.20% 0.27% 0.28%
NPA / Total Assets (%)0.14% 0.20% 0.21%
Net Charge-Offs ($USD Thousands)$45 $595 $39
Allowance for Credit Losses ($USD Millions)$10.557 $12.001 $12.124
Wealth Mgmt AUM ($USD Billions)$1.38 (Dec-2024) —$1.40 (Mar-2025)

Street vs Actual (Q1 2025)

MetricConsensusActualSurprise
EPS ($USD)$0.36*$0.33 —$0.03 (miss)*
Revenue ($USD Millions)$15.8*$21.3*+$5.5 (beat)*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($USD)Q2 2025$0.22 (Q1 declared) $0.22 (Q2 declared) Maintained
Revenue2025Not disclosedNot disclosed—
NIM / Margins2025Not disclosedNot disclosed—
OpEx2025Not disclosedNot disclosed—
Tax Rate2025Not disclosedNot disclosed—

Note: No formal quantitative revenue/margin/OpEx guidance disclosed in Q1 filings/press release; management provided directional commentary on profitable growth and balance sheet optimization .

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in the reviewed document set.

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Acquisitions integration (Eagle, Cincinnati Federal)Emphasis on completing integration; adjusted results disclosed; NIM improved by Q4; equity/assets +70 bps YoY Eagle earn-back achieved a year early; Cincinnati Federal on schedule for early 2026 Improving integration progress
Balance sheet optimization2024 actions included ~$97M asset sales and reducing higher-cost funding; NIM 3.22% in Q4 Lower rates on interest-bearing liabilities; NIM 3.25%; strongest L/D in four quarters Continued optimization
Asset qualityNPA/TA 0.20% at Q4; NPL rose to $4.6M, primarily one CRE loan, with adequate provision NPA/TA 0.21%; NPL $4.9M; increases tied to one C&I and three residential loans; adequate provision Slight deterioration but still strong
Wealth ManagementAUM $1.38B at Dec-2024; robust fiduciary income AUM $1.40B; fiduciary income $2.164M in Q1 Growth continuing
Capital strengthEquity/assets 10.97% at Q4; TBV $10.96/share Equity/assets 11.23%; TBV $11.34/share Strengthening

Management Commentary

  • “Our first-quarter performance reflects the continued success of our strategic initiatives… I am also pleased to report that the April 2024 Eagle… acquisition has already experienced a positive tangible book value earn back, which is a year earlier than expected” — Eric Meilstrup, CEO .
  • “The actions we took last year to improve our balance sheet have reduced more expensive borrowings… highest net interest margin in seven quarters… contributed to a 120% year-over-year increase in earnings per diluted share” — Eric Meilstrup, CEO .
  • “We continue to believe LCNB is well positioned for profitable growth in 2025, as we benefit further from our expanded banking platform, strong asset quality, and compelling financial model” — Eric Meilstrup, CEO .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available in the filings/press releases reviewed; no Q&A content to report this quarter.

Estimates Context

  • Q1 2025 EPS of $0.33 missed consensus $0.36 by $0.03; only two estimates underpin the consensus, limiting breadth*.
  • S&P-defined revenue of $21.3M* exceeded consensus $15.8M* by ~$5.5M*, supported by lower funding costs and higher loan yields highlighted by management .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • NIM inflection continues: 3.25% TE-NIM (+53 bps YoY) with lower funding costs and higher loan yields should underpin near-term spread earnings .
  • Wealth & fee momentum: fiduciary income +9.7% YoY ($2.164M), AUM at $1.40B — diversified fee streams complement NII and reduce reliance on spread income .
  • Credit benign, watchlist rising: NPA/TA remains low (0.21%) but NPLs rose to 0.28% of loans; provisioning remained modest ($197K) — monitor trajectory of identified C&I/residential exposures .
  • Capital strengthening: equity/assets at 11.23%, TBV/share at $11.34 — supports dividend continuity ($0.22/share declared for Q2) and balance sheet flexibility .
  • Estimate calibration: modest EPS miss versus consensus amid strong “revenue” beat; with only two estimates, the street may adjust models to reflect higher NII and fee income mix*.
  • 2025 setup: earlier-than-planned earn-back on Eagle and ongoing optimization are catalysts; key swing factors are funding costs, loan growth, and asset quality normalization .
  • Trading lens: momentum in NIM/fees vs. rising NPLs and efficiency ratio drift; expect near-term narrative to hinge on sustaining spread expansion and fee strength while containing credit costs .

Values retrieved from S&P Global.*