Executive Summary

Q4 2024 delivered a clean inflection: GAAP net income rose to $6.1M ($0.44 EPS) from $4.5M ($0.31) in Q3 and a $(0.02) loss in Q4’23, with ROA at 1.04% and ROE at 9.60% .
Net interest margin expanded to 3.22% (tax‑equivalent) from 2.84% in Q3, aided by ~$97M of 2024 asset sales, balance sheet optimization, and accretion from recent acquisitions .
Noninterest income stayed robust at $6.0M, supported by wealth management (fiduciary income $2.3M) and gains on loan sales, while expenses fell versus Q4’23 as 2023’s merger costs rolled off .
Asset quality remained solid: NPAs/Assets 0.20% and NPLs/Loans 0.27%, with the NPL uptick driven by a single $2.6M CRE relationship deemed adequately reserved by management .
Capital returns remain steady: $0.22 dividend declared for Q4 and full‑year dividends of $0.88 (+3.5% y/y) .

What Went Well and What Went Wrong

What Went Well

Margin and earnings inflection: Q4 NIM rose to 3.22% (from 2.84% in Q3) and GAAP EPS to $0.44 (from $0.31), driven by asset sales, improved balance sheet mix, and accretion from acquisitions .
Wealth management strength: Fiduciary income reached $2.308M in Q4; WM assets rose 15.1% y/y to $1.38B, supporting diversified fee income .
Expense control vs. last year: Noninterest expense of $14.6M was down from $17.6M in Q4’23 as prior merger costs rolled off; efficiency ratio improved to 64.16% from 91.02% in Q4’23 .

What Went Wrong

Nonperforming loans increased y/y (0.27% of loans) due to one CRE relationship ($2.6M), though management does not foresee additional loss given adequate provisioning .
Noninterest income benefited from loan sales this year; sustainability will be monitored given Q2’s tactical sale of below‑market acquired loans (with estimated 3–4 month earn‑back at that time) .
Q/Q deposits declined to $1.878B from $1.917B in Q3 (still up y/y), keeping funding costs and mix in focus into 2025 .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Net Interest Income ($M)	$14.659	$14.970	$16.713
Noninterest Income ($M)	$4.606	$6.407	$5.988
Noninterest Expense ($M)	$17.576	$15.387	$14.592
Provision for Credit Losses ($M)	$2.218	$0.660	$0.649
Net Income ($M)	$(0.293)	$4.532	$6.120
Diluted EPS ($)	$(0.02)	$0.31	$0.44
NIM (tax‑equiv, %)	2.99%	2.84%	3.22%
ROA (%)	(0.05)%	0.76%	1.04%
ROE (%)	(0.53)%	7.23%	9.60%
Efficiency Ratio (tax‑equiv, %)	91.02%	71.83%	64.16%

Balance sheet and asset quality KPIs:

KPI	Q4 2023	Q3 2024	Q4 2024
Net Loans ($B)	$1.713	$1.707	$1.710
Deposits ($B)	$1.824	$1.917	$1.878
Loans/Deposits (%)	94.47%	89.67%	91.67%
Shareholders’ Equity ($M)	$235.3	$253.2	$253.0
TCE/TCA (%)	6.82%	6.88%	7.00%
NPLs/Loans (%)	0.01%	0.19%	0.27%
NPAs/Assets (%)	0.01%	0.14%	0.20%
Net Charge‑offs ($K; % of avg loans)	$102; 0.02%	$84; 0.02%	$595; 0.14%
Fiduciary Income ($M)	$1.828	$2.097	$2.308

Notes:

Q4’24 NIM expansion reflects higher loan yields and balance sheet optimization including ~$97M of asset sales completed in 2024 .
The NPL increase is tied to a single $2.6M CRE relationship that management believes is adequately reserved .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share	Q4 2024	$0.22 (Q3’24 dividend)	$0.22 (declared Nov 18, 2024)	Maintained
Dividend per Share (FY total)	FY 2024 vs FY 2023	$0.85 FY 2023	$0.88 FY 2024	Raised y/y
Operating outlook	2025	N/A	Management plans continued balance sheet enhancement, liquidity improvement, and profitability expansion while maintaining strong asset quality	Qualitative only

No numerical revenue/expense/margin guidance was issued; management commentary indicates focus on optimization and profitable growth in 2025 .

Earnings Call Themes & Trends

(LCNB did not publish an earnings call transcript for Q4 2024; themes below reflect management commentary across Q2–Q4 press materials.)

Topic	Previous Mentions (Q2, Q3 2024)	Current Period (Q4 2024)	Trend
M&A Integration (Eagle, Cincinnati Federal)	Q2: Eagle data & customer conversion completed; one platform under LCNB brand . Q3: Focus on full integration and efficiencies .	Vast majority of integration efforts completed; pivot to optimizing platform and growth .	Integration largely complete; shift to optimization.
Balance Sheet Optimization/Asset Sales	Q2: Sold ~$48.9M below‑market acquired loans; est. 3–4 mo earn‑back . Q3: Intent to sell ~$31.4M acquired LHFS .	~$97M opportunistic asset sales in 2024; aided NIM and liquidity .	Expanded program; tangible NIM benefits.
Net Interest Margin	Q2: NIM +14 bps q/q to 2.86% . Q3: 2.84% .	3.22% in Q4; step‑up vs Q3 .	Improving into Q4.
Wealth Management	Q2: Record assets managed $4.21B; momentum in WM . Q3: Record $4.25B; WM assets $1.37B .	WM assets +15.1% y/y to $1.38B; fiduciary income $2.3M .	Continuing growth and contribution.
Asset Quality	Q2: NPLs 0.17% driven by one $2.6M CRE; adequate provision . Q3: NPLs 0.19% .	NPLs 0.27%; NPAs/Assets 0.20%; same CRE noted as adequately reserved .	Low but higher vs 2023; risk contained.

Management Commentary

“Our 2024 fourth‑quarter results demonstrate the success of our multi‑year growth plan, strategic improvements we have made to our balance sheet… Successfully integrating the Eagle… and Cincinnati Federal acquisitions was an important operating strategy… the vast majority of these integration efforts have been completed.” — CEO Eric Meilstrup .
“Throughout 2024 we completed several actions to improve our balance sheet, including over $97 million of opportunistic asset sales… leverage our excellent asset quality, robust liquidity levels, and improved overall net interest margin.” .
“I believe we are well positioned for profitable growth in 2025, as we benefit further from our expanded banking platform, strong asset quality, and compelling financial model.” .

Q&A Highlights

LCNB did not publish a Q4 2024 earnings call transcript; key clarifications from management’s materials:

Nonperforming loan increase was primarily one CRE relationship ($2.6M); management does not foresee additional loss given current collateral assessment and provisioning .
2024 asset sales (~$97M) and prior tactical sale of below‑market acquired loans (Q2) were executed to enhance NIM and funding costs (Q2 earn‑back estimated at 3–4 months) .
WM growth is a strategic focus, with fiduciary income and AUM at record levels contributing to stable fee income .

Estimates Context

We attempted to pull S&P Global (Capital IQ) consensus for Q4 2024; however, estimates were unavailable at the time of writing due to data access limits today. As a result, beat/miss versus consensus is not shown.
Given the magnitude of the Q/Q EPS improvement ($0.44 vs $0.31) and NIM expansion (3.22% vs 2.84%), we expect sell‑side models to reflect higher NIM trajectory and fee momentum from wealth management, while monitoring funding costs and asset quality .

Key Takeaways for Investors

Margin inflection: Q4 tax‑equivalent NIM of 3.22% suggests the optimization program and acquired assets are now accretive; sustaining >3% NIM is a potential multiple catalyst if funding costs remain in check .
Quality intact despite higher NPLs: NPAs/Assets 0.20%; single‑name CRE drives NPLs; management expects no additional loss, limiting credit downside and preserving reserve flexibility .
Fee diversification: WM continues to scale (AUM +15.1% y/y to $1.38B), supporting fiduciary income run‑rate of ~$2.3M per quarter .
Operating leverage emerging: Q4 efficiency ratio improved to 64% (from 92% in Q2 and 72% in Q3), aided by lower merger costs and better spread income .
Capital and dividends: Equity/assets near 11% with TCE/TCA at 7.0%; $0.22 quarterly dividend maintained; FY dividends rose to $0.88 from $0.85 .
Watchlist into 2025: Deposit trends (Q4 down q/q), pace of loan growth vs. loan sales, and progression of NIM above 3% are the key levers for further ROA/ROE improvement .
M&A synergies: With integration largely complete, the focus shifts to cross‑sell, WM penetration, and cost efficiency to compound earnings .

Additional detail

Dividend declaration (Q4’24): $0.22 per share (record date Dec 2, 2024; payable Dec 16, 2024) .
Q4 selected asset quality metrics: Provision $0.649M; net charge‑offs $0.595M (0.14% of average loans, annualized) .
End‑of‑period balances (Q4’24): Net loans $1.710B; deposits $1.878B; shareholders’ equity $253.0M; TCE/TCA 7.00% .

Sources: LCNB Q4 2024 earnings press release and 8‑K exhibits (Ex. 99.1 and 99.2), Q3 and Q2 2024 earnings materials, and Q4 2024 dividend release .

LCNB CORP (LCNB)·Q4 2024 Earnings Summary