LCNB Corp., the holding company for LCNB National Bank, has closed a private placement of $25 million in aggregate principal amount of its 6.50% Fixed-to-Floating Rate Subordinated Notes due 2036. The issuance qualifies as Tier 2 capital for regulatory purposes, strengthening the bank’s balance sheet ahead of planned expansion in Southwest and South-Central Ohio.

The company intends to use approximately $8.8 million of the net proceeds to repay existing long-term debt. The remaining funds will be allocated to general corporate purposes, primarily supporting growth initiatives at LCNB National Bank. Brean Capital, LLC served as the sole placement agent for the offering, while Dinsmore & Shohl LLP acted as legal counsel to LCNB Corp. and Vorys, Sater, Seymour and Pease LLP served as legal counsel to the placement agent.

Note Structure and Terms

The Notes carry a fixed interest rate of 6.50% per annum for the first five years, with payments made semiannually. After this initial period, the rate converts to a variable rate equal to the then-prevailing 3-month Secure Overnight Financing Rate (SOFR) plus 234 basis points per annum, payable quarterly. Investors may see early redemption if LCNB Corp. exercises its call option on any interest payment date on or after August 15, 2031.

Strategic Context

Eric Meilstrup, Chief Executive Officer of LCNB Corp., stated that the positive investor response reflects the company’s strong performance and growth opportunities. He noted that following record second-quarter results, this capital infusion positions LCNB to execute its strategic plan and enhance shareholder value. The Notes are not registered under the Securities Act of 1933 or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption.

LCNB Corp. ("LCNB") announced record financial results for the second quarter and six months ended June 30, 2026, with net income, net interest income, and earnings per diluted share all reaching new highs. CEO Eric Meilstrup highlighted strong net interest margin expansion, disciplined expense management, and solid growth at LCNB Wealth Management as key drivers of performance. The company also noted that it earned back the tangible book value dilution from its November 2023 Cincinnati Federal acquisition during the first half of 2026.

Record Quarterly Income Statement Performance

The following table summarizes LCNB's income statement highlights for the second quarter and six-month periods:

Net interest income for Q2 2026 was a record $19.8 million, a 12.8% year-over-year increase, driven by higher yields on earning assets, a reduction in interest-bearing liabilities, and a decrease in the average rate paid on interest-bearing liabilities. The tax-equivalent net interest margin expanded 52 basis points year-over-year to 3.99% for Q2 2026, compared to 3.47% in Q2 2025. For the six-month period, net interest margin was 3.91% versus 3.36% in the prior-year period.

Non-interest income for Q2 2026 was $5.4 million, compared to $5.2 million in Q2 2025, with higher fiduciary income partially offset by lower gains on sales of loans. For the six-month period, non-interest income declined 4.0% to $10.0 million, primarily reflecting the bank's strategy of retaining a greater portion of originated residential mortgages. Non-interest expense for Q2 2026 was $15.7 million, nearly flat versus $15.6 million in Q2 2025, reflecting higher salaries and contracted services expenses offset by lower intangible asset amortization, reduced merger-related expenses, and lower net FDIC insurance premiums.

Key Financial Ratios and Per Share Data

The following table presents selected financial ratios and per share metrics:

Return on average assets improved to 1.34% for Q2 2026, up from 1.04% in Q2 2025. Tangible book value per share increased 10.4% year-over-year to $12.90. For the six-month period ended June 30, 2026, LCNB paid $0.44 per share in dividends.

Balance Sheet and Capital Position

The following table summarizes key balance sheet items as of June 30, 2026 and December 31, 2025:

Total assets at June 30, 2026 decreased 3.6% to $2.22 billion from $2.31 billion at June 30, 2025, reflecting the strategic runoff of higher-cost certificates of deposit and IRA balances. During Q2 2026, LCNB originated approximately $123 million in new loans, including $73.1 million in commercial and commercial real estate loans and $40.1 million in residential mortgage loans. Shareholders' equity rose to $280.6 million from $263.5 million at June 30, 2025, with tangible shareholders' equity increasing 10.9% year-over-year.

Asset Quality

Asset quality remained at historically strong levels for Q2 2026, with net recoveries of $1 thousand, or 0.00% of average loans. Total nonperforming loans were $5.8 million, or 0.34% of total loans, at June 30, 2026, compared to $4.8 million, or 0.28% of total loans, at June 30, 2025. The nonperforming assets to total assets ratio was 0.26% at June 30, 2026, versus 0.21% at June 30, 2025. For the six-month period, net charge-offs were $2.7 million, or 0.32% of average loans, primarily reflecting the resolution of two unrelated credits within the logistics sector.

Wealth Management and Assets Under Management

LCNB Wealth Management assets increased 15.3% year-over-year to a record $1.7 billion at June 30, 2026, producing fiduciary income of $2.7 million for Q2 2026. Total assets managed reached $4.25 billion at June 30, 2026, compared to $4.18 billion at June 30, 2025. During Q2 2026, LCNB expanded its banking team in the Columbus market and added talent to its wealth management team in the Cincinnati market.

LCNB Corp. is a financial holding company headquartered in Lebanon, Ohio. Through its subsidiary, LCNB National Bank, it serves customers and communities in Southwest and South-Central Ohio, with banking locations across Butler, Clermont, Clinton, Fayette, Franklin, Hamilton, Montgomery, Preble, Ross, and Warren Counties.