LCNBHIGH SIGNALFINANCIAL10-K

LCNB shows dramatic increases in interest expense (+394%) and credit provisions (+731%) despite strong net income growth, indicating significant balance sheet stress from rising rates and credit deterioration.

The massive spike in interest expense suggests LCNB is facing severe margin pressure from rising funding costs, while the 7-fold increase in credit loss provisions signals potential asset quality issues. The combination of deteriorating credit metrics with substantial reductions in operating cash flow (-63%) and share buybacks (-86%) indicates management is conserving capital amid growing financial pressures.

Comparing 2026-03-11 vs 2025-03-12View on EDGAR →
FINANCIAL ANALYSIS

LCNB's financial profile shows concerning stress signals despite reported net income growth of 71%. The company experienced dramatic increases in interest expense (+394%) and credit loss provisions (+731%), while operating cash flow plummeted 63% and capital expenditures were slashed 75%. The sharp reduction in share buybacks from $23.7M to $3.3M, combined with declining cash positions and debt reduction, suggests management is prioritizing capital preservation amid rising credit costs and funding pressures.

FINANCIAL STATEMENT CHANGES
Provision for Credit Losses
P&L
+730.8%
$250K→$2.1M

Credit loss provisions surged 730.8% — management flagging significant deterioration in loan quality ahead.

Interest Expense
P&L
+393.5%
$4.7M→$23.3M

Interest expense surged 393.5% — significant debt increase or rising rates materially impacting earnings.

Share Buybacks
Cash Flow
-85.9%
$23.7M→$3.3M

Buyback activity reduced 85.9% — capital being redeployed elsewhere or cash conservation underway.

Capital Expenditure
Cash Flow
-74.7%
$3.8M→$959K

Capex reduced 74.7% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Net Income
P&L
+71.4%
$13.5M→$23.1M

Net income grew 71.4% — bottom-line growth signals improving overall business health.

Operating Cash Flow
Cash Flow
-63.1%
$93.2M→$34.4M

Operating cash flow fell 63.1% — earnings quality concerns; investigate working capital changes and non-cash items.

Cash & Equivalents
Balance Sheet
-39.5%
$35.7M→$21.6M

Cash declined 39.5% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Total Debt
Balance Sheet
-32.7%
$155.2M→$104.4M

Debt reduced 32.7% — deleveraging strengthens balance sheet and reduces financial risk.

LANGUAGE CHANGES
NEW — 2026-03-11
PRIOR — 2025-03-12
ADDED
State taxes in Kentucky made up the majority (greater than 50 percent) of the tax effect in this category.
As of March 11, 2026, 14,237,966 common shares were issued and outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A.
LCNB s ability to integrate recent and future acquisitions may be unsuccessful, or may be more difficult, time-consuming, or costly than expected; 3.
LCNB may face competitive loss of customers to both bank and nonbank financial institutions; 5.
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REMOVED
As of March 12, 2025, 14,157,962 common shares were issued and outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A.
LCNB s ability to integrate recent and future acquisitions, including CNNB and EFBI, may be unsuccessful, or may be more difficult, time-consuming, or costly than expected; 3.
changes in general economic conditions and increased competition could adversely affect LCNB s operating results; 7.
Consumer lending activities include automobile, boat, home improvement and personal loans.
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