LCNB Corp. Reports Record Second-Quarter Earnings as Net Interest Income and Strategic Growth Drive Performance
LCNB Corp. (NASDAQ: LCNB) has reported record financial results for the second quarter of 2026, with strong growth in net interest income, net income and earnings per diluted share highlighting the company’s continued progress across its banking and wealth management businesses.
The Ohio-based financial services company announced results for the three and six months ended June 30, 2026, demonstrating continued momentum despite an evolving interest rate environment and ongoing changes in the banking sector.
LCNB said its second-quarter performance was supported by stronger net interest income, continued expansion in its net interest margin, disciplined management of operating expenses, solid growth in its wealth management business and continued loan production.
The company reported a return on average assets of 1.34% for the quarter.
Eric Meilstrup, Chief Executive Officer of LCNB Corp., said the company achieved record results across several key performance measures.
“I am pleased to report that LCNB achieved record second quarter financial results across key performance measures, including net interest income, net income, and earnings per diluted share,” Meilstrup said.
He added that the company ended the quarter with continued net interest margin expansion, disciplined expense management and year-over-year growth at LCNB Wealth Management.
According to Meilstrup, the results reflect the strength of the company’s team, the positive contribution of recent acquisitions and the value LCNB continues to provide to customers, communities and shareholders.
Net Income Rises 27%
LCNB reported net income of $7.5 million for the second quarter of 2026, compared with $5.9 million for the same period in 2025.
The result represents an increase of approximately $1.6 million year over year.
Earnings per basic and diluted share rose to $0.53 for the second quarter, compared with $0.41 in the second quarter of 2025.
For the first six months of 2026, net income reached $11.9 million, compared with $10.5 million during the same period last year.
Earnings per basic and diluted share increased to $0.84 from $0.74 in the year-earlier period.
The improvement in profitability was driven primarily by strong growth in net interest income and continued operational discipline.
Record Net Interest Income
Net interest income reached a record $19.8 million during the second quarter of 2026.
That compared with $17.5 million for the same period in 2025.
For the six months ended June 30, 2026, net interest income totaled $38.6 million, up from $33.8 million in the first half of 2025.
The year-over-year increase was primarily driven by a higher average yield on earning assets, a reduction in interest-bearing liabilities and a lower average rate paid on interest-bearing liabilities.
LCNB’s tax-equivalent net interest margin expanded significantly.
For the second quarter of 2026, the company reported a tax-equivalent net interest margin of 3.99%, compared with 3.47% for the second quarter of 2025.
For the six-month period, the net interest margin was 3.91%, compared with 3.36% in the first half of 2025.
The improvement indicates that LCNB has benefited from better asset pricing and lower funding costs.
Net interest margin remains one of the most important performance indicators for banks because it measures the difference between the income generated from loans and investments and the cost of funding deposits and other liabilities.
Wealth Management Continues to Grow
LCNB Wealth Management remains a key component of the company’s long-term growth strategy.
Total assets managed reached $4.25 billion at June 30, 2026, compared with $4.18 billion at the same point in 2025.
The increase was primarily driven by higher fair values of trust and investment assets and growth in investment services.
The company also reported growth in the number of new LCNB Wealth Management customer accounts.
The increase in managed assets reflects both new customer relationships and higher market values of existing investments.
LCNB said the wealth management business continues to differentiate the company from many traditional community banks.
The business provides the company with a source of fee-based revenue and strengthens relationships with customers who may use multiple financial services.
Noninterest Income Shows Mixed Performance
Noninterest income totaled $5.4 million for the second quarter of 2026, compared with $5.2 million during the same period last year.
The increase was primarily driven by higher fiduciary income.
However, gains on the sale of loans were lower than in the prior-year period.
For the six months ended June 30, 2026, noninterest income declined 4.0% to $10.0 million, compared with $10.5 million in the first half of 2025.
The decline was mainly related to lower gains on the sale of mortgage loans.
LCNB has been retaining a greater portion of originated residential mortgages to support balance sheet loan growth.
As a result, fewer mortgage loans were sold into the secondary market.
The strategy reflects the company’s decision to prioritize balance sheet growth in selected areas rather than maximize short-term gains from mortgage loan sales.
Operating Expenses Remain Disciplined
Noninterest expense totaled $15.7 million in the second quarter of 2026, compared with $15.6 million in the same quarter last year.
The modest increase was primarily attributable to higher salaries and employee benefits, computer maintenance and supplies and contracted services.
These increases were partially offset by lower intangible asset amortization, reduced merger-related expenses and lower net FDIC insurance premiums.
For the six-month period, noninterest expense was approximately $0.2 million higher than in the comparable period of 2025.
The increase was partially driven by higher employee compensation and contracted services.
These increases were offset in part by lower intangible asset amortization, reduced FDIC insurance premiums and lower merger-related costs.
The relatively limited growth in expenses reflects LCNB’s focus on maintaining operating discipline while continuing to invest in its business.
Continued Investment in Strategic Markets
LCNB continued to invest in its banking and wealth management platforms during the second quarter.
The company expanded its banking team in the Columbus market and added talent to its wealth management team in the Cincinnati market.
These additions are designed to strengthen the company’s ability to serve existing customers and attract new relationships.
LCNB views both Columbus and Cincinnati as attractive markets with opportunities for future growth.
The investments reflect the company’s strategy of expanding its presence while maintaining a focus on high-quality service and relationship-based banking.
Loan Production Remains Strong
During the second quarter, LCNB originated approximately $123 million in new loans.
Commercial and commercial real estate loan originations totaled $73.1 million.
The company also originated $40.1 million in residential mortgage loans.
The level of loan production demonstrates continued demand for financing across the company’s markets.
Despite strong originations, net loans at June 30, 2026 were $1.69 billion, a decrease of approximately $14.9 million, or 0.9%, compared with the prior-year period.
The change reflects loan repayments, portfolio activity and the company’s approach to managing its balance sheet.
During the quarter, LCNB sold approximately $20.2 million of residential mortgage loans into the secondary market.
The transactions generated approximately $420,000 in gains recognized in second-quarter noninterest income.
In the second quarter of 2025, LCNB originated $88.8 million in total loans and sold approximately $30.0 million of loans into the secondary market.
Deposits Decline as Funding Strategy Evolves
Total deposits declined 5.2% year over year to $1.82 billion at June 30, 2026, compared with $1.92 billion at June 30, 2025.
The decline was primarily related to the strategic runoff of higher-cost certificates of deposit and IRA balances.
LCNB has been working to optimize its funding mix by reducing certain higher-cost interest-bearing balances.
The decline was partially offset by modest growth in noninterest-bearing demand deposits.
The company’s funding strategy is focused on improving efficiency and managing the cost of deposits.
Tangible Book Value Increases
Shareholders’ equity rose to $280.6 million at June 30, 2026, compared with $263.5 million at the end of the second quarter of 2025.
On a per-share basis, shareholders’ equity increased to $19.69 from $18.59.
Tangible shareholders’ equity increased to $183.8 million from $165.8 million.
The 10.9% year-over-year increase was primarily driven by higher retained earnings and an improvement in unrealized losses in the available-for-sale investment portfolio.
Tangible shareholders’ equity per share rose to $12.90 from $11.69.
LCNB also reported that it had earned back the tangible book value dilution associated with its November 2023 acquisition of Cincinnati Federal during the first half of 2026.
The milestone represents an important achievement in the company’s post-acquisition integration and growth strategy.
Capital Returns Remain a Priority
LCNB continues to return capital to shareholders through regular dividend payments.
During the second quarter of 2026, the company paid a quarterly dividend of $0.22 per share.
For the first six months of the year, LCNB paid total dividends of $0.44 per share.
The company’s capital allocation strategy balances shareholder returns with investments in growth, technology, employees and future expansion opportunities.
Credit Quality Remains Strong Overall
LCNB recorded a provision for credit losses of $276,000 during the second quarter of 2026, compared with $18,000 during the same period in 2025.
For the first six months of 2026, the company recorded a total provision for credit losses of $2.6 million, compared with $215,000 during the first half of 2025.
The increase was primarily related to specific credit developments and changes in the loan portfolio.
Net recoveries during the second quarter totaled $1,000.
That compared with net charge-offs of $79,000 in the second quarter of 2025.
For the six-month period, net charge-offs totaled $2.7 million, representing 0.32% of average loans on an annualized basis.
This compared with net charge-offs of $118,000, or 0.01% of average loans, during the first six months of 2025.
The increase in charge-offs was primarily associated with the resolution of two unrelated logistics-sector credits.
The logistics industry has experienced elevated financial stress in recent periods as a result of broader economic conditions.
Nonperforming Loans Increase Modestly
Total nonperforming loans were $5.8 million at June 30, 2026, representing 0.34% of total loans.
That compared with $4.8 million, or 0.28% of total loans, at June 30, 2025.
The increase was primarily attributable to three commercial loans placed on nonaccrual status since the beginning of 2026.
Nonperforming assets represented 0.26% of total assets at June 30, 2026, compared with 0.21% a year earlier.
Despite the increase, management said asset quality remained at historically strong levels.
LCNB management remains optimistic about the company’s prospects for the remainder of 2026.
The company plans to continue focusing on profitable growth, disciplined risk management, strong asset quality and deeper customer relationships.
The expansion of the banking team in Columbus and the wealth management team in Cincinnati is expected to support future growth.
LCNB also expects its wealth management business to remain an important contributor to long-term expansion.
The company’s second-quarter results demonstrate the benefits of stronger net interest income, improving margins, disciplined expense management and strategic investments in growth markets.
With the company having achieved its tangible book value recovery milestone following the Cincinnati Federal acquisition, management believes LCNB is well positioned to build on its recent momentum.
“We remain committed to the core principles that sustain long-term shareholder value,” Meilstrup said.
The company expects to continue pursuing profitable growth while maintaining a disciplined approach to credit risk, capital management and operating expenses.
Based on its strong second-quarter performance, LCNB said 2026 is shaping up to be a year of continued profitable growth and value creation for customers, communities and shareholders.
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