LCNB reports record Q2 2026 earnings of $7.5M, up 27% on 52bp margin expansion to 3.99%

LCNB reported record Q2 2026 net income of $7.5 million, up from $5.9 million in Q2 2025, with earnings per share rising 29% to $0.53. The improvement was driven by net interest margin expansion of 52 basis points to 3.99%, which produced record net interest income of $19.8 million. Return on average assets improved to 1.34%.

Net charge-offs for the six months ended June 30, 2026 were $2.7 million (0.32% of average loans annualized), significantly higher than $118 thousand (0.01%) in the prior-year period. The increase primarily reflected the resolution of two unrelated credits within the logistics sector. Nonperforming loans increased to $5.8 million (0.34% of total loans) from $4.8 million (0.28%) year-over-year, driven by three commercial loans placed on nonaccrual status since the beginning of 2026.

LCNB originated approximately $123 million in new loans during Q2 2026 ($73.1 million commercial/CRE and $40.1 million residential mortgage), while selling $20.2 million of residential mortgages into the secondary market. The company is retaining a greater portion of originated residential mortgages to support loan growth, reflected in lower secondary market sales compared to $30.0 million sold in Q2 2025.

LCNB reported Q2 2026 net income of $7.5 million, or $0.53 per share, up 27% from $5.9 million ($0.41/share) in Q2 2025. For the six months ended June 30, 2026, net income was $11.9 million ($0.84/share) versus $10.5 million ($0.74/share) in the prior-year period. The improvement reflects higher net interest income and margin expansion.

LCNB's net interest margin (tax-equivalent) expanded to 3.99% in Q2 2026 from 3.47% in Q2 2025, a 52-basis-point improvement. Net interest income rose to $19.8 million from $17.5 million year-over-year. The margin expansion was driven by lower deposit costs (interest expense on deposits fell to $5.2 million from $7.1 million) while loan yields remained stable at 5.72%.

LCNB recorded a $276,000 provision for credit losses in Q2 2026, up from $18,000 in Q2 2025. For the six-month period, the provision was $2.6 million versus $215,000 in the prior year. The Q1 2026 provision was elevated at $2.4 million, driven by a $2.8 million charge-off. The allowance for credit losses on loans stood at $13.6 million (0.80% of total loans) at June 30, 2026.

Nonperforming loans rose to $5.8 million (0.34% of total loans) at June 30, 2026, from $4.8 million (0.28%) a year earlier. Non-accrual loans increased to $5.8 million from $4.5 million. The sequential-quarter trend shows a spike from $2.3 million at December 31, 2025, though the absolute level remains modest relative to the $1.7 billion loan portfolio.

LCNB's deposit mix shifted toward lower-cost funding in Q2 2026. Average IRA and time certificates declined to $351 million from $466 million in Q2 2025, while interest-bearing demand and money market deposits rose to $649 million from $603 million. This shift contributed to the decline in total interest expense on deposits to $5.2 million from $7.1 million year-over-year, supporting margin expansion.