LCNB Corp.

Section 1: Company Overview and Fundamentals

Company Overview:

LCNB Corp. (NASDAQ: LCNB) is a financial holding company. The Company operates, through its wholly owned subsidiary, LCNB National Bank (the Bank), which serves customers and communities in Southwest and South-Central Ohio. The Bank operates over 36 offices; one branch office in Boone County, Kentucky. It offers various loan products, such as commercial and industrial loans, commercial and residential real estate loans, agricultural loans, construction loans, various types of consumer loans, and small business administration loans.

Kalkine’s Dividend Income Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Price Performance:

• LCNB's share price has given a return of 7.31% in the past three months. Similarly, in the long term, stock has recovered by 1.79% over the past six months.

• The stock is leaning towards the mid-levels of its 52-week range of USD 17.92 and 52-week low price of USD 13.24, with the current price near an important support zone of USD14.50-USD 15.50, therefore expectations of upward movement in case these levels hold.
• The price is currently above its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 59.16, upward trending, with expectations of upward movement.

  1.2 The Key Positives, Negatives, and Investment summary   

1.3 Top 10 shareholders:

The top 10 shareholders together form ~27.12% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~4.93% and ~4.91%, respectively.

1.4 Dividend payments with impressive dividend yield:

On July 22, 2025, LCNB Corp. (NASDAQ: LCNB) announced dividends of USD 0.22 per share for Q2 2025, contributing to a year-to-date total of USD 0.44 per share, payable to shareholders of record, underscoring its commitment to consistent shareholder returns. As of July 22, 2025, LCNB’s dividend yield is approximately 5.67%, based on recent stock price data and dividend payments. Historically, LCNB has maintained a steady dividend policy, with a fiscal year dividend yield aligning closely with its five-year average of around 4.8%. However, the company’s dividend coverage ratio for Q2 2025 reflects a strong position, supported by net income of USD 5.9 million, though potential risks from rising nonperforming loans (USD 4.8 million, 0.28% of total loans) could challenge future earnings stability. LCNB’s focus on cost management and acquisition synergies suggests a stable outlook for sustaining and potentially growing its dividend payments over time.

1.5 Key Metrics

LCNB Corp. (NASDAQ: LCNB) demonstrated significant financial improvement in Q1 2025 compared to Q1 2024, as evidenced by key performance metrics. Fee revenue as a percentage of total revenue rose slightly from 9.52% to 9.86%, reflecting modest growth in non-interest income sources. The efficiency ratio improved markedly from 86.84% to 73.33%, indicating enhanced operational efficiency and better cost management, likely driven by reduced merger-related expenses from the 2024 Eagle acquisition. The income before tax margin surged from 12.46% to 25.75%, showcasing stronger pre-tax profitability, while the net margin nearly doubled from 10.71% to 21.52%, underscoring robust bottom-line growth supported by a 24.2% increase in net income to USD 5.9 million in Q2 2025. The income tax rate increased from 14.01% to 16.43%, reflecting a higher tax burden. Additionally, the trailing twelve-month (TTM) return on average common equity improved from 4.71% to 6.54%, and the TTM return on average total assets rose from 0.49% to 0.71%, signaling better utilization of equity and assets to generate returns, positioning LCNB favorably for sustained profitability despite potential risks from rising nonperforming loans.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of Q2FY25:

Section 3: Key Risks and Asset & Credit Quality Overview:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

 Price Performance:

• LCNB's share price has given a return of 7.31% in the past three months. Similarly, in the long term, stock has recovered by 1.79% over the past six months.

• The stock is leaning towards the mid-levels of its 52-week range of USD 17.92 and 52-week low price of USD 13.24, with the current price near an important support zone of USD14.50-USD 15.50, therefore expectations of upward movement in case these levels hold.
• The price is currently above its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 59.16, upward trending, with expectations of upward movement. 

4.2 Fundamental Valuation

Valuation Methodology: Price/Book Value Per Share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 22, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.