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LC

LCNB CORP (LCNB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 EPS was $0.49, up 58.1% YoY, with tax-equivalent NIM expanding 73 bps YoY to 3.57% and efficiency ratio improving to 63.44% . Results were driven by lower funding costs, payoff/maturity of lower-rate assets, and disciplined OpEx control .
  • LCNB beat SPGI consensus on EPS and revenue: Q3 EPS $0.49 vs $0.425 consensus; Q3 revenue $23.62M vs $17.60M consensus (2 estimates). Q2 also beat: EPS $0.428 vs $0.38; revenue $22.77M vs $16.85M.
  • Asset quality remained strong: NPLs 0.12% of loans, NCOs 0.04% annualized, ACL/loans 0.72%; TCE/TA rose to 8.03% .
  • Loans and deposits declined modestly as part of planned balance sheet optimization; management expects loan growth to resume in H1 2026, while wealth management AUM hit a record $1.54B and boosted fiduciary income +23.4% YoY .
  • Leadership updates in October (new CFO, President, CRO, CAO) enhance succession depth and governance; quarterly dividend of $0.22/share paid .

What Went Well and What Went Wrong

  • What Went Well

    • Material NIM expansion and efficiency gains: NIM 3.57% (+73 bps YoY) and efficiency ratio 63.44% (vs 71.83% YoY), reflecting balance sheet actions and OpEx discipline .
    • Wealth momentum: trust/investment and investment services assets reached a record $1.54B; fiduciary income +23.4% YoY, highlighting cross-sell traction post recent acquisitions .
    • Credit quality solid: NPLs fell to $2.0M (0.12% of loans) and NPA/Assets to 0.09%; provision of $211K vs $660K YoY .
    • CEO quote: “Decreased higher cost certificates of deposit…payoff of lower-rate loans…and maturities of low-rate investment securities…expanded net interest margin…while controlled noninterest expense drove a meaningful improvement in our efficiency ratio” .

  • What Went Wrong

    • Non-interest income fell 11.0% YoY to $5.7M, primarily on lower gain-on-sale of loans and BOLI income, partially offset by higher fiduciary income and service charges .
    • Loans and deposits declined: net loans $1.667B (−2.4% YoY, −2.5% YTD); total deposits $1.849B (−3.5% YoY, −1.6% YTD) amid deliberate balance sheet reduction and customer payoffs .
    • Total assets decreased 4.4% YoY to $2.244B as optimization continued; management points to returning to loan growth in H1 2026 vs near-term optimization .

Financial Results

Against Estimates (SPGI consensus; oldest → newest)

MetricQ2 2025 ConsensusQ2 2025 ActualQ3 2025 ConsensusQ3 2025 Actual
EPS ($/diluted)0.38*0.4284*0.425*0.49*
Revenue ($M)16.85*22.771*17.60*23.619*

Note: * Values retrieved from S&P Global.

Quarterly Trend (company-reported; oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Interest Income ($M)14.97 16.30 17.54 18.13
Non-Interest Income ($M)6.41 5.22 5.25 5.70
Total Revenue = NII + Non-Interest ($M)21.38 21.52 22.79 23.83
Net Income ($M)4.53 4.61 5.92 6.94
Diluted EPS ($)0.31 0.33 0.41 0.49
Tax-Equivalent NIM (%)2.84 3.25 3.47 3.57
Efficiency Ratio (TE) (%)71.83 73.33 68.18 63.44
ROAA (%)0.76 0.81 1.04 1.21

Loan Portfolio Mix ($M; period-end; oldest → newest)

CategoryQ3 2024Q2 2025Q3 2025
Commercial & Industrial119.08 110.53 107.93
Commercial Real Estate (secured)1,105.41 1,110.88 1,083.75
Residential Real Estate459.74 459.47 454.92
Consumer22.09 18.45 17.75
Agricultural13.11 14.41 15.26
Loans, Gross1,719.06 1,713.01 1,679.03
ACL on Loans11.87 12.11 12.17
Loans, Net1,707.19 1,700.90 1,666.86

Asset Quality KPIs (oldest → newest)

KPIQ3 2024Q2 2025Q3 2025
Net Charge-offs ($K)84 79 169
NCOs / Avg Loans (annualized, %)0.02 0.02 0.04
NPLs ($M)3.28 4.77 1.96
NPLs / Loans (%)0.19 0.28 0.12
ACL / Loans (%)0.69 0.71 0.72
NPAs / Assets (%)0.14 0.21 0.09

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance / CommentaryChange
Loan growthH1 2026Not provided“Expect a return to growth in the first half of 2026” New directional commentary
Dividend (quarterly)Ongoing$0.22/share$0.22/share paid in Q3; YTD $0.66/share Maintained
Revenue/Margins/OpEx/Tax rate2025Not providedNo formal numeric guidance provided in Q3 PR/8-K N/A

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our corpus; themes below are drawn from management’s quarterly communications.

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Balance sheet optimization & NIMQ1: NIM reached 3.25%, highest in seven quarters; actions reduced expensive borrowings and fortified balance sheet . Q2: NIM 3.47% with lower funding costs and stable rates .NIM 3.57% on reduced high-cost CDs and runoff of low-rate assets; efficiency improved meaningfully .Improving
M&A integration (Eagle, Cincinnati Federal)Q1: Eagle earn-back achieved a year earlier; Cincinnati Federal on track by early 2026 . Q2: Cross-sell traction; investment services AUM up >300% at acquired branches .Continued optimization post acquisitions; portfolio composition refined .On track
Wealth ManagementQ1: Wealth AUM $1.40B (+7.4% YoY) . Q2: AUM grew; trust & investments contributions rising .Record trust & investment services assets of $1.54B; fiduciary income +23.4% YoY .Strengthening
Credit & asset qualityQ1: NPA/Assets 0.21%; provision $197K . Q2: Provision $18K; NPLs 0.28% (one C&I and three residential loans) .NPLs 0.12%; provision $211K; NPA/Assets 0.09% .Stable-to-better
Growth outlookQ1: Well-positioned for profitable growth in 2025 . Q2: Macro fluidity acknowledged; positioned for long-term growth .Expect loan growth resumption H1 2026; focus on platform/talent investments .Moderating near term; resume later

Management Commentary

  • “Decreased higher cost certificates of deposit…payoff of lower interest rate loans…maturities of low-rate investment securities…expanded net interest margin by 73 basis points YoY to 3.57%, while controlled noninterest expense drove a meaningful improvement in our efficiency ratio” — Eric Meilstrup, CEO .
  • “Our new loan pipeline remains steady, and we expect a return to growth in the first half of 2026…momentum in LCNB Wealth continues to build, with record…assets of $1.54 billion…contributed to a 23.4% year-over-year increase in third quarter fiduciary income” .
  • “Looking to the final quarter of 2025 and into 2026, we remain focused on investing in our platform, talent, and capabilities to drive sustainable growth and long-term shareholder value” .

Q&A Highlights

  • An earnings call transcript for Q3 2025 was not available in our document set; no Q&A could be reviewed or summarized [ListDocuments showed none].

Estimates Context

  • Q3 2025: EPS beat by ~$0.065 ($0.49 vs $0.425*); revenue beat by ~$6.02M ($23.619M vs $17.60M*) with two estimates in coverage*. Drivers: higher NIM from funding cost reductions and asset mix, plus disciplined OpEx .
  • Q2 2025: EPS beat by ~$0.048 ($0.4284 vs $0.38*); revenue beat by ~$5.92M ($22.771M vs $16.85M*) with two estimates*.
    Note: * Values retrieved from S&P Global.

Key Takeaways for Investors

  • Positive earnings momentum appears durable: sequential NIM improvement, better efficiency, and >1% ROAA point to structurally higher profitability vs 2024 baseline .
  • Balance sheet remains conservatively positioned: lower NPAs/NPLs, modest provisions, and higher TCE/TA (8.03%) provide resilience into 2026 .
  • Revenue mix is strengthening: record wealth AUM and higher fiduciary income diversify beyond spread income; continue to watch gain-on-sale variability .
  • Near-term growth muted by deliberate optimization and payoffs; management guides to loan growth resuming H1 2026—watch pipeline conversion and regional macro .
  • Capital return steady with $0.22 quarterly dividend; book value per share up to $19.02 and tangible BV to $12.15, aided by retained earnings and AFS marks .
  • Monitor funding trends: deposits declined slightly; continued remix away from higher-cost CDs should support NIM if rates remain stable .
  • Leadership transitions (CFO/President/CRO/CAO) enhance execution depth; no disruption flagged .

Appendices

Additional Q3 2025 Balance Sheet Highlights

  • Total assets $2.244B (−4.4% YoY; −2.7% YTD); deposits $1.849B (−3.5% YoY; −1.6% YTD); long-term debt $104.7M (down from $155.2M at YE’24) .

Cross-Reference Note

  • Q3 2025 PR and 8‑K (Exhibits 99.1 & 99.2) report consistent KPIs and financials across income statement, margin/efficiency, and asset quality metrics .

Other Q3 2025 Press Releases

  • Board change (director resignation) .
  • Leadership promotions (President, CFO, CRO, CAO) tied to succession plan and growth strategy .