LCNB Corp. Reports Mixed Q3 Results, Net Income Up 11% Year-Over-Year, Despite Decline in Nine-Month Net Income

LCNB Corp. reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, LCNB's net income increased to $4,532,000, up from $4,070,000 in the same period of 2023. However, for the nine months ended September 30, 2024, net income decreased to $7,372,000 from $12,921,000 in 2023. The decline in nine-month net income was attributed to increased provisions for credit losses and higher non-interest expenses, primarily due to acquisitions and rising operational costs.

Total interest income for the third quarter rose to $26,398,000, compared to $19,668,000 in 2023, driven by a $319.2 million increase in average loan balances and a 58 basis point rise in the average rate earned on loans. Conversely, total interest expense also increased significantly to $11,428,000 from $6,097,000, reflecting higher rates on interest-bearing deposits and long-term debt. As a result, net interest income for the quarter was $14,970,000, slightly up from $13,571,000 in 2023.

Non-interest income saw a substantial increase, reaching $6,407,000 for the third quarter, compared to $3,578,000 in the prior year. This growth was driven by higher service charges, bank-owned life insurance income, and net gains from loan sales. However, total non-interest expenses also rose to $15,387,000 from $12,244,000, primarily due to increased salaries, occupancy costs, and merger-related expenses from the acquisitions of Cincinnati Bancorp, Inc. and Eagle Financial Bancorp, Inc.

As of September 30, 2024, total assets increased to $2,365,676,000 from $1,971,269,000 at the end of the previous fiscal year. Total deposits rose to $1,917,005,000, up from $1,824,389,000, reflecting organic growth and deposits acquired through the recent mergers. Long-term debt also increased significantly to $155,662,000 from $113,123,000, primarily due to additional advances from the Federal Home Loan Bank.

The company adopted the Current Expected Credit Loss (CECL) model, resulting in a $2.4 million increase in the allowance for credit losses. As of September 30, 2024, the allowance for credit losses stood at $11,867,000, up from $10,525,000 at the end of 2023. The ratio of non-accrual loans to total loans was 0.17%, indicating a slight increase in credit risk.

Overall, LCNB Corp. continues to expand its market presence through strategic acquisitions while navigating challenges related to rising interest rates and operational costs.