Breaking Down LCNB Corp. (LCNB) Financial Health: Key Insights for Investors

If you are looking at LCNB Corp. right now, the short takeaway is that management's balance sheet strategy is paying off in profitability, but the market is still waiting for a clear growth signal. The numbers from the third quarter of 2025 are defintely strong: LCNB reported a net income of $6.9 million, translating to an earnings per share (EPS) of $0.49, which marks a massive 58.1% improvement over the same period last year. This jump is largely due to the net interest margin (NIM)-the difference between interest income and interest expense-expanding significantly to 3.57% as of September 30, 2025, from 2.84% a year prior. However, while profitability is up, total assets have decreased to $2.24 billion, reflecting the deliberate balance sheet reduction strategy to shed higher-cost liabilities, and this is why analysts have a consensus "Hold" rating with a median 12-month price target of around $16.75. You're seeing a high-quality bank with a strong return on average assets (ROAA) of 1.21% for the quarter, plus a steady $0.22 quarterly dividend, but you need to understand the trade-off between current asset contraction and future loan growth to make your next move.

Revenue Analysis

You want to know where LCNB Corp. (LCNB) is making its money, and the simple answer is that the bank is executing a clear strategy: drive Net Interest Income (NII) while significantly growing its fee-based business. The numbers from the 2025 fiscal year show that this approach is working, fueled by smart acquisitions and balance sheet management.

For the nine months ended September 30, 2025, the company's revenue streams are overwhelmingly dominated by traditional banking, but the non-interest side is gaining serious momentum. The estimated full-year 2025 revenue is approximately $90.84 million. The primary revenue engine remains Net Interest Income (NII)-the difference between what the bank earns on loans and investments and what it pays on deposits-but the growth in non-interest income is a key story here.

Breakdown of Primary Revenue Sources

LCNB's revenue is split into two main buckets. The first is NII, which comes from its core lending activities like commercial and industrial loans, real estate, and consumer mortgages. The second is Non-interest Income, which is the fee-based revenue. For a concrete look, let's check Q1 2025:

• Net Interest Income (NII): Reached $16.3 million in Q1 2025.
• Non-interest Income: Totaled $5.2 million in Q1 2025.

Here's the quick math: Q1 2025 total revenue was about $21.5 million, meaning NII accounted for roughly 75.8% of the total, with Non-interest Income contributing the remaining 24.2%. That's a defintely solid mix for a community-focused financial services company.

Year-over-Year Revenue Growth

The growth rate is the most compelling part of the 2025 story. In the third quarter of 2025 alone, LCNB Corp. reported revenue of $18.13 million, which marks a significant year-over-year rise of 21.1%. This isn't just organic growth; it reflects the successful integration of recent acquisitions, like the Eagle Financial Bancorp, Inc. deal, which is paying off faster than expected. This kind of double-digit percentage increase in revenue is exactly what you want to see from a regional bank expanding its footprint.

The growth momentum is clear across the quarters:

The expanding Net Interest Margin (NIM)-the spread between interest earned and interest paid-shows the company is effectively managing its cost of funds and loan yields, a critical factor in a fluctuating rate environment.

Contribution of Business Segments and Key Changes

The non-interest segment is where LCNB is strategically differentiating itself. This segment is heavily influenced by LCNB Wealth Management (the trust division), which is a high-margin business. Fiduciary income, a core component of this segment, saw a 23.4% increase for the nine months ended September 30, 2025. This growth is driven by an increase in assets under management and new customer accounts.

What this estimate hides is the strategic shift. The increase in non-interest income is also due to net gains from sales of loans, plus higher service charges. The company's focus on leveraging its expanded Southwestern Ohio footprint, a key part of its Mission Statement, Vision, & Core Values of LCNB Corp. (LCNB), is directly translating into higher fee income. This diversification away from being purely dependent on NII is a sign of a more resilient, modern financial institution. The strategic acquisitions are the clear catalyst for this change, expanding the platform to support both NII and wealth management growth.

Next step: Review the latest Q3 2025 earnings call transcript to confirm management's forward-looking guidance on NII and non-interest income for Q4.

Profitability Metrics

If you're looking at LCNB Corp. (LCNB) right now, the first thing you need to see is the sharp upward swing in their bottom line for 2025. They've made a defintely strong move on profitability, but the underlying operational efficiency is still a mixed bag. The direct takeaway is this: strategic acquisitions and balance sheet management are working, but the cost-to-income ratio needs continued pressure.

For a bank, we look at the Net Interest Margin (NIM), which is the closest thing to a gross profit margin-it shows how well they manage the spread between what they earn on loans and what they pay on deposits. LCNB's NIM expanded significantly, hitting 3.57% in the third quarter of 2025, up from 2.84% in the same period last year. That 73 basis-point jump is a clear sign that their strategy of reducing expensive borrowings and repricing loans is paying off in a stable rate environment. That's a huge win for core profitability.

Moving down the income statement, the Operating Profit Margin (Total Revenue minus Non-Interest Expense) for Q1 2025 was approximately 26.5%. Here's the quick math: total Q1 revenue (Net Interest Income of $16.3 million plus Non-Interest Income of $5.2 million) was $21.5 million, and non-interest expense was $15.8 million. The resulting operating income of $5.7 million shows a decent margin, but the true story is in the efficiency ratio, which we'll get to.

The most eye-catching figure is the Net Profit Margin. LCNB's profit margins rose sharply to 26.2% recently, up from 9.4% last year. This margin gain is a massive 233.9% increase in earnings over the last year, which strongly supports the view that management's focus on cost controls and a better business mix is creating high-quality profits. For the first nine months of 2025, the company reported a total net income of at least $17.436 million ($4.6M in Q1 + $5.9M in Q2 + $6.936M in Q3), a significant improvement over the prior year.

Trends and Industry Comparison

The trend is one of dramatic recovery and strategic execution. After a multi-year earnings decline (a 7.3% annual rate over the past five years), the 2025 results show a clear inflection point. The NIM expansion is a structural improvement, and the net profit margin surge is a strong indicator of successful integration of recent acquisitions like the 2024 Eagle Financial Bancorp deal, which achieved its tangible book value earn-back a year earlier than expected.

When you stack LCNB up against the regional bank industry, a few things stand out:

• Net Profit Margin: LCNB's recent 26.2% is competitive, though a large regional peer like Regions Financial Corp. reported a profit margin on total operations of 28.67% in Q3 2025. LCNB is closing the gap fast.
• Valuation (P/E): LCNB is trading at a Price-to-Earnings (P/E) ratio of around 9.1x, which is lower than the broader US Banks industry average P/E of 13.5x. This suggests the market hasn't fully priced in the recent margin gains and earnings growth.
• Earnings Growth: Analysts are forecasting annual earnings growth of 0.9% for LCNB over the next few years, which lags the broader regional bank sector's expected 17% annual earnings growth. This disconnect is where the risk lies-the margin improvement is great, but they need to translate that into faster overall earnings growth.

Operational Efficiency and Cost Management

Operational efficiency, measured by the efficiency ratio (non-interest expense as a percentage of total revenue), is the area to watch. In Q1 2025, LCNB's efficiency ratio worsened to 73.33%, up from 64.16% in the prior quarter. This means that for every dollar of revenue, 73.33 cents went toward non-interest operating expenses. For a well-run regional bank, you want to see that ratio well below 60%. The increase is partly due to integration costs and higher operating expenses associated with the Eagle acquisition, but it shows there's still work to do on cost management to make that 26.2% net margin sustainable.

The good news is that management is actively addressing this. They are seeing lower funding costs and higher loan yields, which is the right side of the ledger to focus on. Plus, non-interest income is up 32.9% year-over-year in Q1 2025, driven by a record $1.40 billion in Wealth Management assets under management (AUM). Diversifying revenue away from pure lending helps stabilize the top line, even if revenue is projected to decline 11.2% per year over the next three years.

If you want to dig deeper into the company's strategic positioning, you should check out the full analysis in Breaking Down LCNB Corp. (LCNB) Financial Health: Key Insights for Investors. Your next concrete step is to track the Q4 2025 efficiency ratio to see if they can push it back toward the low 60s.

Debt vs. Equity Structure

You're looking at LCNB Corp. (LCNB) to see how they fund their growth, and the quick takeaway is simple: they are a conservatively financed regional bank. Their debt-to-equity (D/E) ratio is significantly lower than the industry average, which points to a strong capital cushion.

As of late 2025, LCNB Corp. operates with a remarkably low debt-to-equity ratio of just 0.40. To put that into perspective, the average D/E ratio for US Regional Banks sits closer to 0.50. This means that for every dollar of shareholder equity, LCNB Corp. uses only 40 cents of debt financing, a clear sign of management's preference for stability over aggressive leverage.

Here's the quick math: with total shareholders' equity at $269.9 million as of the third quarter of 2025, this 0.40 ratio implies a total debt load of approximately $107.96 million. This conservative stance is defintely a plus in a volatile interest rate environment.

Balancing Debt and Capital Strength

For a bank, debt isn't just bonds; it's primarily deposits and wholesale borrowings. LCNB Corp. balances its funding between customer deposits and institutional debt, mainly through the Federal Home Loan Bank (FHLB) and correspondent bank lines of credit. This mix is typical for a community bank, but their capital position is what matters most.

• Primary Debt Sources: Customer deposits and FHLB borrowings.
• Equity Cushion: Shareholders' equity stood at $269.9 million (Q3 2025).
• Liquidity Buffer: They maintain substantial available liquidity, including roughly $154.7 million in remaining FHLB borrowing capacity and an additional $115.0 million in correspondent bank lines as of September 30, 2025.

This conservative capital structure is a core part of their financial health, signaling resilience to market shocks. For a deeper dive into who is investing in this stable structure, check out Exploring LCNB Corp. (LCNB) Investor Profile: Who's Buying and Why?

Recent Financing Strategy and Credit Profile

LCNB Corp.'s recent activity is not about new debt issuance but strategic balance sheet optimization. In the third quarter of 2025, the company executed a planned balance sheet reduction strategy. This action focused on decreasing higher-cost funding sources, specifically reducing expensive certificates of deposit and paying off several lower-rate loans. This is a smart move to expand their net interest margin (the profit difference between lending and borrowing).

While a regional bank of this size often doesn't carry a public credit rating from agencies like S&P or Moody's, their financial metrics speak for themselves. The low D/E ratio and strong regulatory capital ratios-which are consistently at the upper end of historical ranges-serve as an effective proxy for high credit quality and operational stability. They are focused on efficiency, not on taking on more risk.

What this estimate hides is the potential for a slight dip in loan growth as they refine their portfolio composition, but the trade-off is a healthier, more profitable balance sheet. You want to see this kind of disciplined capital allocation.

Liquidity and Solvency

You want to know if LCNB Corp. (LCNB) has the cash to cover its near-term obligations, and the short answer is yes, but the picture is nuanced. The bank's management is confident, citing ample borrowing capacity, but a closer look at cash flow trends suggests investors should watch its free cash flow closely. LCNB's balance sheet shows a stable, though slightly contracting, asset base, with total assets at September 30, 2025, at $2.244 billion, down from $2.307 billion at the end of 2024.

For a bank, traditional liquidity ratios are less about inventory and more about immediate cash and marketable securities versus short-term debt. LCNB's most recent figures show a Current Ratio of 0.91 and a Quick Ratio of 0.91. Since both are below 1.0, it means the bank's immediate current assets don't fully cover its current liabilities. Still, for a bank, this is often offset by the quality and immediate marketability of its loan and investment portfolios, plus its access to wholesale funding.

Working Capital and Funding Strength

The working capital trend for LCNB Corp. (LCNB) shows a slight contraction in total assets, but management has been proactive in securing external liquidity lines. The primary funding sources are customer deposits, but the backstop is substantial. For instance, LCNB had approximately $71.2 million in off-balance sheet Insured Cash Sweep (ICS) immediately available for liquidity as of September 30, 2025. Also, the total remaining borrowing capacity with the Federal Home Loan Bank (FHLB) was approximately $154.7 million. That's a defintely solid safety net.

LCNB's core strength is its ability to access funds, which is critical. This includes line of credit arrangements totaling $115.0 million with correspondent banks. Management has stated unequivocally that LCNB experienced no liquidity or operational problems through the third quarter of 2025. You can review the strategic direction that guides these decisions in the Mission Statement, Vision, & Core Values of LCNB Corp. (LCNB).

Cash Flow Statement Overview

The cash flow statement paints a clear picture of where LCNB's money is moving. For the latest available period in 2025, the breakdown shows a strong core business but a net outflow after financing activities. Here's the quick math:

• Cash From Operating Activities: $60.02 million
• Cash From Investing Activities: $67.26 million
• Cash From Financing Activities: $-130.79 million

The negative cash flow from financing of $-130.79 million is the main driver of the overall negative change in cash of $-3.51 million. This is common for banks managing debt and paying dividends, but it's where the near-term risk lies.

Liquidity Concerns and Strengths

The primary strength is the confirmed access to external funding and management's confidence. The $154.7 million in FHLB borrowing capacity and $115.0 million in correspondent bank lines are significant liquidity buffers.

The main concern for investors, however, is the analyst commentary pointing to 'liquidity concerns due to declining free cash flow.' While the bank has a positive operating cash flow, the net negative change in cash of $-3.51 million confirms that the total cash on the balance sheet is shrinking. This isn't a crisis, but it means the bank has less internal flexibility and is relying more on its external funding sources to manage its capital structure and dividend payments. Your action item is to monitor the Q4 2025 cash flow statement to see if the trend of negative net cash change reverses.

Valuation Analysis

You're looking at LCNB Corp. (LCNB) and wondering if the market is giving you a fair shake, and honestly, you should be. The quick takeaway is that based on core banking metrics like Price-to-Book, LCNB appears to be trading at a slight discount to its tangible assets, but the analyst community is holding steady with a neutral view. It's a classic value-trap signal that requires a closer look at the balance sheet.

As of November 2025, LCNB's stock price is trading around $15.97, which is near the middle of its 52-week range of $13.34 to $17.92. The stock has been resilient, but it hasn't broken out, which is why the valuation ratios tell a compelling story about potential undervaluation, especially for a regional bank.

Here's the quick math on key valuation multiples:

• Price-to-Earnings (P/E): The trailing P/E ratio sits at 9.17. To be fair, this is a low multiple, suggesting the stock is cheap relative to its earnings compared to the broader market and even the finance sector average.
• Price-to-Book (P/B): This is the crucial one for a bank. LCNB's P/B ratio is currently 0.85. A P/B ratio under 1.0 means the market is valuing the company for less than the net value of its assets (book value), which is a clear sign of potential undervaluation.
• EV/EBITDA: For a bank, Enterprise Value-to-EBITDA is less useful because banks' capital structures and core earnings (Net Interest Income) are fundamentally different from non-financial companies, so we focus on P/B instead.

The market is defintely telling you that LCNB is trading below its liquidation value, but remember, a low P/B can also signal concerns about asset quality or future profitability, even if the nonperforming assets-to-total-assets ratio was a low 0.21% at mid-year 2025.

Dividend and Analyst Sentiment

The stock offers a strong income component that you shouldn't ignore. LCNB pays an annual dividend of $0.88 per share, translating to a current dividend yield of about 5.7%. This yield is substantial, especially when you consider the sustainability of the payout.

The dividend payout ratio is a healthy 53.0% based on trailing earnings, and analysts project this to drop to a even safer 48.9% next year based on expected 2026 earnings per share (EPS) of $1.80. They have increased the dividend for seven consecutive years, which shows a real commitment to shareholder returns.

The Wall Street consensus on LCNB is a firm Hold. The average analyst price target is $16.25, which is only a marginal upside from the current price. This consensus suggests analysts view the stock as fairly valued right now, mapping the low P/B as a fair trade-off for the regional bank's moderate growth outlook.

To dig deeper into the drivers of these valuation metrics, you'll want to review the full analysis: Breaking Down LCNB Corp. (LCNB) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at LCNB Corp. (LCNB) and seeing strong Q3 2025 earnings-a net income of $6.936 million is defintely a good sign-but as a seasoned analyst, I always map the near-term risks first. For a community bank like LCNB, the biggest threats aren't just internal; they're macro-economic and regulatory shifts that can hit margins fast.

The core risk for LCNB is navigating a volatile interest rate environment. Even with the net interest margin (NIM) expanding to a strong 3.57% in Q3 2025, any unpredictable move by the Federal Reserve could dramatically change their funding costs or loan demand. Plus, they operate in a competitive Ohio market, so there's a constant battle to retain customers against larger regional players.

Operational and Financial Headwinds

The financial risks for LCNB are manageable right now, but they require constant monitoring. Here's the quick math on credit quality: while asset quality is generally strong, total nonperforming loans-those loans not generating income-stood at $4.8 million, or 0.28% of total loans, as of June 30, 2025. That's a jump from the prior year, signaling a slight uptick in credit risk that could lead to higher loan charge-offs if the economy softens.

On the operational side, LCNB has been strategically growing through acquisitions, such as Cincinnati Bancorp, Inc. and Eagle Financial Bancorp, Inc. The risk here is integration failure. If combining systems and cultures is more difficult or costly than expected, it could derail the expected benefits and strain their total assets, which were $2.24 billion at September 30, 2025.

• Interest Rate Risk: Volatility impacts the 3.57% NIM.
• Credit Quality: Nonperforming loans hit $4.8 million at mid-year 2025.
• Competition: Losing customers to larger, more diversified banks.
• Acquisition Integration: Cost and difficulty of merging operations.

Mitigation Strategies and Risk Management

To be fair, LCNB Corp. (LCNB) isn't sitting still. They've clearly prioritized risk management as a strategic pillar. A key action was solidifying their leadership team in October 2025, including the promotion of a Chief Risk Officer. That's a clear move to strengthen their governance structure and risk oversight.

Financially, management has been proactive. They executed over $97 million in opportunistic asset sales in 2024, which was a smart move to optimize the balance sheet and is expected to be accretive to their NIM in 2025. This focus on balance sheet optimization and maintaining a conservative credit culture is their primary defense against a downturn.

Also, a major risk for any modern bank is cybersecurity. LCNB addresses this with a multi-layered defense strategy, including firewalls, encryption, and continuous monitoring, plus they maintain cybersecurity insurance coverage. They're not just hoping for the best; they are planning for the worst.

It is important for investors to understand the company's long-term vision, which you can review here: Mission Statement, Vision, & Core Values of LCNB Corp. (LCNB).

Next step: Dig into the latest 10-Q's granular data on loan portfolio composition to stress-test the $4.8 million nonperforming loan figure.

Growth Opportunities

You want to know where LCNB Corp. (LCNB) is headed, and honestly, the path is through smart integration and deepening customer relationships, not just new branch openings. The company's near-term growth is defintely anchored in successfully digesting its recent acquisitions, particularly the Eagle Financial Bancorp, Inc. deal from April 2024, which expanded their footprint across the compelling Cincinnati region and into Northern Kentucky. This isn't about massive, risky expansion; it's about making the new parts work better than the old.

The core growth driver is a strategic focus on cross-selling its higher-margin wealth and trust services into these newly acquired markets. The quick math here shows this strategy is already paying off: in the second quarter of 2025 alone, LCNB reported that assets under management in recently acquired branches rose over 300% year-over-year. That is a massive jump that directly boosts non-interest income, which is a key profitability lever for any community bank.

• Integrate acquisitions effectively for cost savings.
• Drive non-interest income via wealth management cross-sell.
• Maintain a strong net interest margin.

For future revenue growth, analysts are mapping a path of continued earnings improvement, even as the banking environment remains fluid. LCNB's Q3 2025 performance was strong, with reported net income hitting $6.936 million, a significant increase from the same period last year. This strong result was built on a net interest income of $18.126 million, up from $14.970 million a year prior, showing improved profitability from their lending activities.

Looking ahead, the consensus analyst forecast projects LCNB's earnings per share (EPS) to grow from an estimated $1.65 per share to $1.80 per share in the next year, representing a healthy 9.09% increase. This projection hinges on the management team's ability to continue optimizing the acquired assets and maintaining disciplined expense control, which was evident in the Q2 2025 non-interest expense decline of 12.4% compared to Q2 2024. Cost control is just as important as revenue growth in this business.

The company's competitive advantage is its position as a premier community banking institution in Southwestern Ohio and Northern Kentucky, offering a full suite of services-from commercial loans to wealth management-that larger national banks often struggle to deliver with the same local, relationship-focused touch. Management is focused on leveraging these strategic acquisitions, which is a clear action plan. To dive deeper into who is betting on this strategy, you should check out Exploring LCNB Corp. (LCNB) Investor Profile: Who's Buying and Why?